Opinon on using Money Transfer

JoeCrystal

Hello all,

I want to ask for opinions on whether it is a good idea.

At it stands, I got a loan of £9,220.56 with MBNA at 8.90% (Paying £196.99 per month for the next remaining 57 months). However, Barclaycard is offering me up to £10k in money transfer with 4.5% fees and 0% interest on this balance until 1 February 2027 (Only available until 30th Jun). The quote to close the personal loan is £9,361.89. [So roughly £9,783.17 including the transfer fees]. So in theory, if I pay it off over 18 months @ £543.51 per month, the money transfer will be paid off by then.

The only thing I am not sure is that I usually always pay my credit cards in full every month, so I am not entirely sure how it will work if I have the money transfer balance. Would it show separately on the statement, and I need to adjust the direct debit every month if I still use the card for day-to-day spending?

Any risks and issues with the idea above?   So any thoughts would be helpful, thank you!  

th081

Yes you need to adjust the direct debit to the minimum. The obvious risk is around the £543 per month, can you afford to pay this each month as anything left after the interest free period will incurr 20 plus rates.

kimwp

th081 said:

Yes you need to adjust the direct debit to the minimum. The obvious risk is around the £543 per month, can you afford to pay this each month as anything left after the interest free period will incurr 20 plus rates.

I think if they paid the minimum, they'd be charged interest on their day to day spends?

I've avoided the issue by having separate cards for transfers and day to day spends which get paid in full.

grumpy_codger

kimwp said:

th081 said:

Yes you need to adjust the direct debit to the minimum. The obvious risk is around the £543 per month, can you afford to pay this each month as anything left after the interest free period will incurr 20 plus rates.

I think if they paid the minimum, they'd be charged interest on their day to day spends?

I've avoided the issue by having separate cards for transfers and day to day spends which get paid in full.

I think Barclaycard if one of few cards where promotional balances can be safely combined with new purchases. No interest is charged on any balances if purchases are paid in full and in time.

https://www.barclays.co.uk/credit-cards/promotional-rates/

You can still benefit from up to 56 days interest-free.

To avoid standard interest, you’ll need to clear your balance each month – excluding any promotional balances. Otherwise, interest will be charged on anything new you buy, from the date the transaction appears on your account.

+ https://www.barclaycard.co.uk/personal/customer/interest-free-period

Not sure if they have a DD option for this, so manual monthly payments can be needed, possibly combined with a DD for a minimum payment.

surreysaver

grumpy_codger said:

kimwp said:

th081 said:

Yes you need to adjust the direct debit to the minimum. The obvious risk is around the £543 per month, can you afford to pay this each month as anything left after the interest free period will incurr 20 plus rates.

I think if they paid the minimum, they'd be charged interest on their day to day spends?

I've avoided the issue by having separate cards for transfers and day to day spends which get paid in full.

I think Barclaycard if one of few cards where promotional balances can be safely combined with new purchases. No interest is charged on any balances if purchases are paid in full and in time.

https://www.barclays.co.uk/credit-cards/promotional-rates/

You can still benefit from up to 56 days interest-free.

To avoid standard interest, you’ll need to clear your balance each month – excluding any promotional balances. Otherwise, interest will be charged on anything new you buy, from the date the transaction appears on your account.

+ https://www.barclaycard.co.uk/personal/customer/interest-free-period

Not sure if they have a DD option for this, so manual monthly payments can be needed, possibly combined with a DD for a minimum payment.

And Barclaycard will reduce the direct debit if additional payments are made, unless the additional payments are made too close to the direct debit date so that it cannot be changed.

prettyandfluffy

You may be restricted to 95% of the available credit which would include the fee, so it might worth giving them a call to check.

th081

grumpy_codger said:

kimwp said:

th081 said:

Yes you need to adjust the direct debit to the minimum. The obvious risk is around the £543 per month, can you afford to pay this each month as anything left after the interest free period will incurr 20 plus rates.

I think if they paid the minimum, they'd be charged interest on their day to day spends?

I've avoided the issue by having separate cards for transfers and day to day spends which get paid in full.

I think Barclaycard if one of few cards where promotional balances can be safely combined with new purchases. No interest is charged on any balances if purchases are paid in full and in time.

https://www.barclays.co.uk/credit-cards/promotional-rates/

You can still benefit from up to 56 days interest-free.

To avoid standard interest, you’ll need to clear your balance each month – excluding any promotional balances. Otherwise, interest will be charged on anything new you buy, from the date the transaction appears on your account.

+ https://www.barclaycard.co.uk/personal/customer/interest-free-period

Not sure if they have a DD option for this, so manual monthly payments can be needed, possibly combined with a DD for a minimum payment.

I have a Barclaycard with a BT and occasional spend, I have a minimum payment debit set up but I always make the payment early which stops the direct debit.

JoeCrystal

th081 said:

grumpy_codger said:

kimwp said:

th081 said:

Yes you need to adjust the direct debit to the minimum. The obvious risk is around the £543 per month, can you afford to pay this each month as anything left after the interest free period will incurr 20 plus rates.

I think if they paid the minimum, they'd be charged interest on their day to day spends?

I've avoided the issue by having separate cards for transfers and day to day spends which get paid in full.

I think Barclaycard if one of few cards where promotional balances can be safely combined with new purchases. No interest is charged on any balances if purchases are paid in full and in time.

https://www.barclays.co.uk/credit-cards/promotional-rates/

You can still benefit from up to 56 days interest-free.

To avoid standard interest, you’ll need to clear your balance each month – excluding any promotional balances. Otherwise, interest will be charged on anything new you buy, from the date the transaction appears on your account.

+ https://www.barclaycard.co.uk/personal/customer/interest-free-period

Not sure if they have a DD option for this, so manual monthly payments can be needed, possibly combined with a DD for a minimum payment.

I have a Barclaycard with a BT and occasional spend, I have a minimum payment debit set up but I always make the payment early which stops the direct debit.

@th081 Out of interest, so let say I get the statement on 9th June and the minimum payment is on 1st July, let's say I got £2400 in promotional balance and £500 in purchase or spending in that statement, so no interest payable (and assuming I paying down promotional balance £200 per month), I make the payment £700 early on 17th June and that would cover the purchase plus some on top. I won't pay any interest on it? Does that make sense? If so, then it certainly looks more appealing.

As for this: "Yes, you need to adjust the direct debit to the minimum. The obvious risk is around the £543 per month, can you afford to pay this each month, as anything left after the interest-free period will incur 20 plus rates."

I can cope with a £346.01 increase per month and keep throwing any leftover cash, I hope it can reduce it much quicker. I think I am getting my head around this, so I am slightly more hopeful now. Thank you, everyone, for your help

Jami74

To keep it simple. Why don't you apply for a different card for your purchases? If it was me I'd try to find a 0% on purchases, just so there was a buffer when moving from from £200 a month loan payments to £500 a month money transfer payments. Then treat the money transfer card like the loan and set up the direct debit for the same each month to pay it off.

JoeCrystal

That is a good idea Jami74, I will certainly consider that.

Anyway, I requested the money transfer yesterday morning. I got an email from Barclaycard saying my money transfer’s all finished and that the money has been transferred from my Barclaycard into my current account (at Barclay). I received the email at 19:47 yesterday, but still have not received the cash in the current account. (And I am pretty sure that I entered the account number, sort code and the debit card number correctly)   

Am I worrying too early about this (and I already have doubts about whether I entered the information correctly!), and hopefully, I should see the money today? *fingers crossed*

grumpy_codger

JoeCrystal said:

...(And I am pretty sure that I entered the account number, sort code and the debit card number correctly)   

... (and I already have doubts about whether I entered the information correctly!), ...

In the future enter any important information manually only if this is absolutely unavoidable.

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