Pay Credit Card Balance or Balance Transfer and keep cash in savings

hufc2002

I will try and keep this as short as possible.

Credit Card statements balance is £3231 (summer holiday flights).

I have the money available in savings however would I be better off doing a balance transfer (3.3% BT fee (£96.73)) and leaving the money in savings (Chase 4.85%)?  Savings balance is currently £5210.

Any advice?  I can't do the maths.

Gandalf644

hufc2002 said:

I will try and keep this as short as possible.

Credit Card statements balance is £3231 (summer holiday flights).

I have the money available in savings however would I be better off doing a balance transfer (3.3% BT fee (£96.73)) and leaving the money in savings (Chase 4.85%)?  Savings balance is currently £5210.

Any advice?  I can't do the maths.

How long is the 0% balance transfer period?

hufc2002

Gandalf644 said:

hufc2002 said:

I will try and keep this as short as possible.

Credit Card statements balance is £3231 (summer holiday flights).

I have the money available in savings however would I be better off doing a balance transfer (3.3% BT fee (£96.73)) and leaving the money in savings (Chase 4.85%)?  Savings balance is currently £5210.

Any advice?  I can't do the maths.

How long is the 0% balance transfer period?

Until 01/03/2026

enthusiasticsaver

If the BT fee is 3.3% and you are getting 4.85% on savings then logically leaving it in savings would make sense so long as you can repay the balance within the 0% deal period.  Otherwise you will have another BT fee or run the risk of interest being charged.  

CliveOfIndia

hufc2002 said:

would I be better off doing a balance transfer (3.3% BT fee (£96.73)) and leaving the money in savings (Chase 4.85%)? 

The maths is pretty simple.  4.85% on £3221 is £156 per year, near as dammit.  Assuming (you need to check) that your balance transfer offer is for 0%, then after 1 year you're £59 up (£156 interest earned, less the £97 fee).  Thereafter, all the interest you earn is clear profit.

Bear in mind you'll need to make the minimum payment each month to the credit card - not an issue if this just comes out of your regular spending without having to touch your savings.  And just factor in the timings if you need to give notice to make a withdrawal from your savings account.

But yep, as long as the savings don't get touched and you're 100% certain you'll still have them when the BT promotional offer expires then it makes sense to do the BT.