is 0% balance transfer cheaper than my current daily card?

mightyjack

I have a Cap 1 card with the following rates: Purchases interest is 30.34%, Cash withdrawals is 30.34%, Balance transfers is 30.34%

Of course I'm aware it's a crap rate and I'm trying to improve my rating. If I do a balance transfer on a 0% transfer card, will my payments be cheaper? so that would mean instead of paying 30% on my current balance it would then be 0%, right?

Brie

I don't quite follow your questions but 0% is obviously less than 30% but you only get charged 30% if there's a balance owing that you haven't cleared.

Payments won't necessarily be cheaper - they depend on the T&Cs that set the minimum payments to be made each month. Obviously if you do a 0% BT on to a card with a zero balance your minimum payments will be £X. If you have the same card with the same balance but don't have 0% your minimum payments will be the same £X but more of that payment will be going against interest that has been accrued and less against the total balance. So when you get to month 2 (assuming no purchases made) your minimum payment on the 0% card will be less than the 30% card as the balance on that is higher.

Does that help? If not come back with some specific info on what you've got now and a more specific answer can be given.

mightyjack

Thanks @Brie , I'm trying to figure out basically if transferring my balance would be beneficial, my goal is to pay off the balance quicker

Brie

Well if you are being charged interest then moving to a 0% card will save you money and you will pay it off sooner. Have you got a 0% BT card already? Or are just looking to get one? If you have a less than perfect credit history (possible - hence the high interest rate) you may not be eligible for a second card or one with a high enough balance to completely clear the first card. No matter - even if you can shift a portion of a high interest debt to 0% you will be saving some money.

Altior

https://forums.moneysavingexpert.com/discussion/6663831/is-0-balance-transfer-cheaper-than-my-current-daily-card

Yes.

Disregard your credit report impact, paying no interest is vastly superior to paying any interest, never mind 30.34%.

A side effect might be an improvement of your credit profile. But the priority is to pay less interest.

One proviso I'd say is that you should be concerned with how long the 0% rate lasts, and what the standard rate is once the offer runs out. If it's a lot higher than the current rate, and the deal is very short, it's possible that it could end up being a worse position.

sammyjammy

What is the balance on the Cap1 card now? How much can you afford/do you want to pay each month?