Best Balance Transfers Discussion Area

spf_2

Rachel

I believe that this will be considered as a cash payment on your new credit card, which will be thus exempt from the transfer deal. So you will in fact pay interest at your card providers cash interest rate, which is typically in the order of 27%.

As the new deal expires in 7 months, and you imply that you can pay off your debt in this time : Are you sure that it's worth while not simply paying interest on the existing debt?

If you do a BT this will cost you £18.

What is your MONTHLY interest rate on your current card? It's usually close to 1%

So for example, each month (assuming you can pay it off in 6 months?)

Month 1 2 3 4 5 6 7

Balance 600 500 400 300 200 100 0

Interest 6 5 4 3 2 1 0
PCM

TOTAL interest = £ 21

You only need to increase the payments by a few pounds to drop the total interest down to the same £18 BT fee. So you can cut up the capital one card and resist the temptation to spend more on it: Just a thought!

spf_2

myownfault,
the high interest definitely needs to be addressed. I can see two possibilities a 0% BT or a good old fashioned loan. In either case, based on your ability to make repayments the debt would not be cleared for approximately 4 years. A loan at 7% over 48 months would incur interest of £478 over the term. Conversely, if we assume that you can get a 0% BT card with a 3% fee, lasting 6 months, you would pay a BT fee every six months on a sliding scale of £96, £84 etc every 6 months, totalling £432.

Carrying on as you are would take 10 years to pay and cost just over £5200 in interest.

In all of the above cases I've assumed a regular monthly payment of around £78.

Although not the cheapest option: but because of the term involved, I would (personally) recommend you look at getting a loan. It requires no further discipline of 6 monthly BT's and the payments are "automatic". Playing the BT game for 4 years is not easy, and one error could blow the whole plan
.
Addendum : I am effectively suggesting debt-consolidation albeit only of one debt. Most people taking this route often end up in the same situation again very soon after transferring the debt, so whatever route you choose : cut up the credit card!

Addendum 2: If your regular outgoings are significanty higher than the £80 that you can afford to make to the CC you could try using the trick of my above posting to clear your high interest debt quickly. e.g. if you spend £500 on "other stuff" you can use this to clear your debt in 6 months and end up with same debt but on a 0% card. I would not recommend this in your case though, as in reality it would only delay things.

milliemonster

Hubby has just been accepted for an Egg card with a 0% balannce transfer until Jan 2010 which is fantastic!!! (credit limit £3.5k) so this should hopefully start accelerating how quick we can pay some of our debts off

My question is, the highest APR's we have at the moment are on the argos card (27.9%) and A&L (MBNA) card (26.4%), should we just pay off the argos and some of the A&L card onto the Egg card? or before we do this should we try and negotiate the MBNA interest rate down (before transferring some of the balance), has anyone any experience of doing this and if so how do you do it?

Also, he is tempted now to apply for another 0% deal, do you know who would be best to look at for this?

spf_2

Milliemonster, the only thing that matters is the interest rate. Therefore your plan should be to attack the high interest rates first. You should definitely call the providers first though to try to get their interest rates reduced. Call all of them! you've nothing to lose, there are many examples on this forum of the dialogs others have succesfully used. Once you've done this then the picture of which is the highest interest debt may change, so attack the debt according to this new heirarchy.

You also mention "Hubby will apply", "what can he apply for": Can I pose a question? If you don't have tightly linked finances, could you consider applying for a card for yourself as the primary cardholder? e.g. the same Egg card? My wife used to be a 2nd cardholder on my CC accounts but now she has her own account CC's, so we get "double" the limits, not sure if everyone could get this or if we've just been lucky?

clean1

I am new on this site too.... HI all

I can't seem to get another credit card in order to do BT from Amex and BC. I am paying on time but only the minimum payment can't afford any more.

i have good credit scoring but they say I have too much credit already.
Can anyone suggest or help me please?

spf_2

clean1, are we talking "£10's", "£100's" or "1000's" of debt?

Without knowing your personal position it's difficult to help but here's some general thoughts.....
How many BT card have you tried to apply for? How many 0% on purchases have you applied for? i.e Are you sure to have 100% exhausted this route?
Have you considered a loan at a lower rate? As this would be debt consolidation not extra credit it may be feasible.
Have you tried the other money saving tips on this site to try to minimise other areas of your spend to create more cash to clear the debt? At least on a temporary basis.
Or can you take a part time or temporary job? e.g. My local Mall is recruiting for Xmas right now: maybe you have something similar nearby?
If debt is "small" : Do you have an overdraft facility with your bank? Will they increase this?
Do you have a partner who could help?

Moggles_2

rachrob wrote: »

I have recently been accepted for a Capital One card that gives me 0% balance transfer until May 09. If I ring Capital One and say "I want to transfer £600 please" I know there is a fee of about 3%, but can I, when I get my statement from the card with £600 on, ring up and pay it off with my Capital One card? Thus the balance is transferred with no fee and I can pay it off interest free till May? Is this right?

Originally Posted by spf
I believe that this will be considered as a cash payment on your new credit card, which will be thus exempt from the transfer deal. So you will in fact pay interest at your card providers cash interest rate, which is typically in the order of 27%.

Most (though not all) credit card companies take payment over the phone, but those that offer this facility will only accept payment with your debit card

Moggles_2

milliemonster wrote: »

Hubby has just been accepted for an Egg card with a 0% balance transfer until Jan 2010 (credit limit £3.5k). My question is, the highest APRs we have at the moment are on the Argos card (27.9%) and A&L (MBNA) card (26.4%). Should we just pay off the Argos and some of the A&L card onto the Egg card or before we do this should we try and negotiate the MBNA interest rate down (before transferring some of the balance)?

Congratulations on your success with Egg.
:beer:

There's no harm in asking certainly, but once his balances were cleared, he would be in a much stronger position to negotiate a lower rate. In fact once he's reduced his balance to zero, courtesy of Egg or another credit card, MBNA will more than likely make him a 0% offer. This lender in particular has a reputation for market-leading existing customer deals

Originally Posted by milliemonster
Also, he is tempted now to apply for another 0% deal. Do you know who would be best to look at for this?

Which credit cards - besides A&L/MBNA and Argos - do you have at the mo?

Moggles_2

spf wrote: »

Could you consider applying for a card for yourself as the primary cardholder e.g. the same Egg card? My wife used to be a 2nd cardholder on my CC accounts, but now she has her own account CCs, so we get "double" the limits. Not sure if everyone could get this or if we've just been lucky?

That's right. Each applicant is scored individually, so your partner's credit cards neither help nor hinder your chances of acceptance and credit limit.

That said, if you only have three or four credit cards between you, it may be better to
apply to a different lender as you cannot transfer balances between cards issued by the same bank.

JimmyTheWig

Moggles wrote: »

That said, if you only have three or four credit cards between you, it may be better to apply to a different lender as you cannot transfer balances between cards issued by the same bank.

This isn't of much concern when it is Egg, is it? If you can do a super balance transfer (i.e. transfer money to your current account) you can then use that to pay off any debt you want...