Best Balance Transfers Discussion Area

Jo4

My friend has approximately £5,500 of debt on credit cards at a rate of 5.9% pa except for £895.81 which is at a rate of 2.9% pa. They are currently repaying £230 a month but their payments will increase in September and therefore they will have all the credit card debt repaid by Christmas 2008.

I was wondering since they will pay the debt off in 1 year should they consider applying for a 0% card which has a transfer fee or should they stay with the cards they have? Which is the cheaper option and how do you work it out?

pyewackett_2

Hi All
Hope others can benefit from this. Online yesterday for new customers only saw a BT deal of 2.9% for 24 months with a 2.5% fee. In the post this morning as an existing customer got offered a lousy 5.9% for 6 months! Called up and pulled the loyalty card and they gave me the better deal straight away!
:j

deborahwaine

I need to transfer from a card which runs out of 0% interest in March. I have another card due to run out of same in July. Do I transfer card one to card two then wait till June to find another 0%,or transfer card one next month then card two as the interest free period runs out? Which will be the cheaper method?

Moggles_2

Originally Posted by Jo4
My friend has approximately £5,500 of debt on credit cards at a rate of 5.9% pa except for £895.81 which is at a rate of 2.9% pa. They are currently repaying £230 a month, but their payments will increase in September and therefore they will have all the credit card debt repaid by Christmas 2008.

Is s/he really sure they can clear this debt by the end of the year? By my reckoning, they'll need to double their repayments in September, then double that figure again!

I was wondering since they will pay the debt off in 1 year should they consider applying for a 0% card which has a transfer fee or should they stay with the cards they have? Which is the cheaper option and how do you work it out?

If s/he has a good credit history and is in a position to apply for a 0% balance transfer card, I would go for it. Even with a 3% handling fee, the new card would save money over the year.

Have a look at the Minimum Repayments calculator on the main site.(Don't be put off by the name.You can enter more than the bare minimum payment required)

If you play around with the above figures, you'll see it's definitely worthwhile transferring these balances

sammy452

Hi
Am new to the site and needed some advice.
I have a barclaycard with £3500 on it (limit £5600) and Halifax with £3800 on it (limit £7900). I am paying 26.75% interest on Halifax so really want to get rid of this one. Spoke to Barclaycard about tranferring Halifax card at 6.9% life of balance but will only increase limit to £7000. Barclaycard suggested transferring all monies to Halifax and then transferring back to Barclaycard to take advantage of 6.9% for total debt. This sounds to good to be true and wondered whether I will come unstuck down the line if I take this route?
I am a housewife so have no big income, therefore can't apply for other cards as far as I am aware?
Any advice would be gratefully appreciated.
Thank you.

Moggles_2

Originally Posted by pyewackett
Online yesterday, for new customers only, saw a BT deal of 2.9% for 24 months with a 2.5% fee [HSBC]

This one's mentioned in Martin's *Best Balance Transfers* article

In the post this morning as an existing customer got offered a lousy 5.9% for 6 months! Called up and pulled the loyalty card and they gave me the better deal straight away!

Congratulations & thanks for the tip :beer:

Jo4

Moggles wrote: »

Is s/he really sure they can clear this debt by the end of the year? By my reckoning, they'll need to double their repayments in September, then double that figure again!



If s/he has a good credit history and is in a position to apply for a 0% balance transfer card, I would go for it. Even with a 3% handling fee, the new card would save money over the year.

Have a look at the Minimum Repayments calculator on the main site.(Don't be put off by the name.You can enter more than the bare minimum payment required)

If you play around with the above figures, you'll see it's definitely worthwhile transferring these balances

Sorry, forgot to say that they are upping their payments in May by £300 a month and then they are upping them again in September by another £320 a month. Does that make any more sense?

I must attempt to find out how much they could save.

bram01

Thanks for the new article. There's just one part I must take issue with:

Q. How much should I pay off each month?

A. As much as you can, even 0% debt is still debt. The more you repay, the faster the debt disappears. Especially important is that you try and pay more than the set minimum. For more on that and tips on how to do it, read the Minimum Repayments: Danger! article.

Surely if the debt is 0% then the best action is to pay off the minimum amount each month and put the rest in a high interest savings account until the end of the 0% deal*. That way you can earn money on your debt thus reducing it further. Plus, if you pay tax but have a flexible or offset mortgage, use that instead to reduce the amount of mortgage interest you pay, which is then tax free. At the end of the 0% simply drawdown the over-payments to clear the card debt.

* I know you mention stoozing in the linked article, but surely it applies even if you're trying to clear an old debt too.

Moggles_2

Originally Posted by deborahwaine
I need to transfer from a card which runs out of 0% interest in March. I have another card due to run out of same in July.
Do I transfer card one to card two, then wait till June to find another 0%?

Not a good idea, IMO. You would extend the 0% period on your first balance by 3-4 months at most and you could incur two balance transfer fees in the process.

... or transfer card one next month, then card two as the interest free period runs out? Which will be the cheaper method?

If you mean, transfer the balance on card one to a new card (let's call this card three) next month, then transfer the balance on card two, when the interest free period runs out in July, to card number four then, yes. This would produce the longest 0% periods in which to pay off your balances

Arbie

Hi All,

My 0% period on two cards ends in mid-March (bad planning, I know!) - HSBC and Virgin.

I also have a Halifax card, which I took out in October 07 for the 0% on purchases for 15 months deal, with £2k on it. This money is presently sitting in my savings account garnering some interest.

My ideal situation would be to pay off the Halifax card with the earmarked funds, and use this as leverage for them to alter my deal to the 15 months at 0% BT deal mentioned previously in this thread - this saves me applying for a new card (and indeed, possibly two, given the size of my debt); and as I aim to pay it off in 13 months, would be the last BT (the Halifax credit limit will cover my BT debt in full). Does anyone have any hints or tips as how to best twist Halifax's arm into letting me run with this plan?? How do I appear a valued customer to them when I'm asking to move a debt to them?

All help appreciated!