Clear balance or transfer balance

Mmcc847

My credit card debt is less than my savings.  If I transfer the balance to a new 0% interest card, and keep the savings, I’ll earn about £400 interest over the 0% term.  There will be a £200 fee to transfer the balance.  Should I just clear the balance with my savings?  Or transfer it and make a net profit of about £200 over 30 months?

Mark_d

I would just clear the balance.  Keep things simple and remove the risk of things going wrong

Nasqueron

What you are talking about is Stoozing, there is a sub dedicated to it. Provided you can pay it monthly and don't foresee any issues where you will need to spend the savings e.g. you have an emergency fund separately you can keep it ticking along and enjoy the interest

CliveOfIndia

I'd agree with Nasqueron - all other things being equal, you may as well earn the interest and make a bit of profit overall.  That does rely, as noted above, on the fact that you can absolutely guarantee not to touch the savings, so that you'll be able to repay the card when the time comes.

The only other thing you may wish to consider is whether you foresee the need to take out further credit in the next 30 months.  Whenever you apply for any credit product, any existing debt is always factored into their calculations - and will influence whether, and at what rate, they're prepared to lend to you.  If you're not going to want any further credit in the near future, then no problem.  If this particular debt is small in comparison to your income and existing debt/expenses, then it probably won't make a significant difference anyway.  But it's just something to bear in mind.

surreysaver

Mark_d said:

I would just clear the balance.  Keep things simple and remove the risk of things going wrong

This is the MSE website. If you earn in interest than you're paying in fees, surely you'd earn the interest?