Best Balance Transfers Discussion Area

sfax

SaChA wrote: »

I currently have a loan with Nationwide which isn't due to finish until some time mid 2014. I pay £363 per month, but want to try and clear this earlier than just letting it run. I took the loan out 08/2011 for 4 years, my interest rate isn't huge, maybe 10.8% off the top of my head. I have been reading about balance transfers. Can you balance transfer from a loan to a credit card, and is it worth while doing in my situation.

Also how do I find out from an old loan if I paid PPI? I know I can get this information, but not sure how.

Thanks - ps the show on ITV 13/11/12 inspired me to try sort something out.

If you have a very good credit rating and you use a purchase credit card for all of your spending (that you pay off in full each month) you can slowly switch a loan to a BT card. I have done exactly that recently to the tune of £8k (reducing APR from 8% to 2%) - average monthly spend is £1500

If you have no purchase card to generate cash to pay down the loan then the only way is a card that allows a BT to a bank account and they cost more in fees and are harder to get

Your main stumbling block may be the amount of the loan and getting a credit card with a limit high enough. You'd probably need 2 BT cards (hence the need for an excellent credit rating).

To test the water you should apply for a BT card and see what limit you get offered. If you've no purchase CC, you'll need a card that allows BT to current accounts

The next problem may come when the card(s) 0% rates come to an end. You'll need a new deal then and you may get rejected. For that reason I would only use cards with 20 month + 0% deals and ensure at least 1/2 is paid off after 20 months

twiglet98

I'm looking at 0% BT deals, dithering, and would appreciate another opinion!

Existing cards:
1) Barclaycard 21.9% Balance £8160 Limit £14350
2) Barclaycard 17.9% Balance £3800 formerly Egg, card cancelled when I rejected interest rate hike
3) Santander 16.9% Balance £2605.26 Limit £3500 (was used for a 0% deal early 2011 which has come to an end).

I have never missed a payment, pay fixed monthly amounts slightly over the minimum.

I hold a FlexAccount with Nationwide and on logging into internet banking I am being offered their Select card at 0% for 20 months with a 3.1% fee. I have not yet tried a soft search. A mailshot from Santander today offers 0% until August 2013 with a 3% fee. Barclaycard's online account page offers 0% until May 2013 with a 2.9% fee.

I hope to get the Nationwide 0% card, which seems a good deal and I have had a current account there for over 30 years. Before applying, I wonder if two cards albeit wth higher balances would look better than having three other cards. I don't think there's a way to make it clear on applying that a successful BT to their 0% card would allow the card from which the balance was transferred to be closed. I thought I could try this little juggle:

- Transfer the Santander balance to Barclaycard's 0%, which means it is added to the card with the highest balance and highest standard interest rate.

- Then transfer the old Egg balance to Santander at their 9 month 0% deal. I can't shift this to Barclaycard as Egg has been taken over by BCard.

- Close the Egg/Barclaycard account completely.

- Apply to Nationwide and if accepted for a long 0% deal, transfer as much as possible to them from the high-rate Barclaycard.

The maths baffles me. Is the fee for these short-term BT offers from Santander and Barclaycard enough to mean it's not cost-effective? And in terms of my planned application to Nationwide, is the number of cards more or less relevant than the total balance-to-limit ratio?

Thanks for any thoughts on this. I can't get my head around it as late as this, and spend a lot of late evenings musing, but I would really like to sit down and focus on it over the weekend.

McCreary

Hi there,

Just transferred to a Halifax Credit Card using a BT deal. The BT fee has now appeared on my statement. Am I charged interest on this fee or is it just added to the regular BT balance?

Thanks in advance :-)

sfax

@McCreary: No, it's treated as part of the BT balance

@twiglet: You need to consider your debt to credit limit ratio and yours is quite high at the moment. Yours is 67% and 30-40% is seen as good according to MSE posters (it's all guesswork but based on experience). If you close an account, it will be even higher because you'll reduce your credit limit available

Re. comparing % fee and length of 0% borrowing, the best way is to calculate the equivalent APR %. Take £5000 as an example, add the % fee and the length of time you get for 0% and calculate the equivalent APR by using an APR calculator and looking at a loan over the same period (you have to assume you'd pay off a constant amount each month so that the whole balance is paid at the end of the 0% period). Most online APR calculators will show you the total interest paid, so you just need to find the APR where total interest paid is the same as the handling fee

twiglet98

sfax wrote: »

You need to consider your debt to credit limit ratio and yours is quite high at the moment. Yours is 67% and 30-40% is seen as good according to MSE posters (it's all guesswork but based on experience). If you close an account, it will be even higher because you'll reduce your credit limit available

Thank you for this, I'm clearly a long way off 30-40% and of course it will take even longer to get there without any 0% deals. I think the former Egg card is a spanner in the works as it has no available credit. I sometimes wish I had agreed to the rate hike a couple of years ago, at least it would make the total balance-to-limit ratio look better now.

I won't risk applying for a new card and will work out whether the short 0% deals are worth trying, I think probably it's best to leave things as they are for the time being and bump up my overtime to increase my payments instead. Many thanks for your input.

sfax

twiglet98 wrote: »

Thank you for this, I'm clearly a long way off 30-40% and of course it will take even longer to get there without any 0% deals. I think the former Egg card is a spanner in the works as it has no available credit. I sometimes wish I had agreed to the rate hike a couple of years ago, at least it would make the total balance-to-limit ratio look better now.

I won't risk applying for a new card and will work out whether the short 0% deals are worth trying, I think probably it's best to leave things as they are for the time being and bump up my overtime to increase my payments instead. Many thanks for your input.

30-40% is seen (by some) as optimum. This doesn't mean you definitely won't get credit at 70%, just that you may be more likely to get more credit at 30%

I'm not sure how the credit limit is calculated for closed accounts but I was assuming that your limit would always equal your balance as that seems logical to me. May not be how it works in practice.

Also, if you're not likely to be able to change anything for a few months then you may as well apply now just to check that you do get rejected. Worse case scenario is a rejection and one search on your credit report. After 6 months this search (the lender doesn't see the success/failure) is unlikely to be seen as a negative. I would apply just to test the water if in your shoes. Your current situation is costing you a lot of money in interest

goodfella789

Done some homework and I'm looking to do a money transfer from a credit card to a current account to avoid hefty overdraft charges.
The best deal for a money transfer seems to be 0% for 20 months with 4% fee on the MBNA Platinum card. The problem is that i already own an MBNA Platinum card.
Does anyone know:
a) The chances of MBNA offering me the above new customer deal (the existing customer deal is only 0% for 12 months and a 5% fee)?
b) If they refuse to match could i close my account and apply as a new customer straight away?
Thanks.

sfax

goodfella789 wrote: »

Done some homework and I'm looking to do a money transfer from a credit card to a current account to avoid hefty overdraft charges.
The best deal for a money transfer seems to be 0% for 20 months with 4% fee on the MBNA Platinum card. The problem is that i already own an MBNA Platinum card.
Does anyone know:
a) The chances of MBNA offering me the above new customer deal (the existing customer deal is only 0% for 12 months and a 5% fee)?
b) If they refuse to match could i close my account and apply as a new customer straight away?
Thanks.

a) very unlikely in my experience but worth asking the question, particularly if threatening to close

b) I know some lenders won't let you have new customer promotions for 12 months after closing the account (e.g. Nationwide)

goodfella789

Thanks for the quick reply sfax.
The Platinum card is in my name only.
If what you said above is what happens, do you think my wife could apply for a Platinum card in her name only, then do a money transfer to our joint account?
Additionally, could she apply for a card in both our names after i close my MBNA account?

sfax

goodfella789 wrote: »

Thanks for the quick reply sfax.
The Platinum card is in my name only.
If what you said above is what happens, do you think my wife could apply for a Platinum card in her name only, then do a money transfer to our joint account?
Additionally, could she apply for a card in both our names after i close my MBNA account?

I don't see why not but bear in mind she will be financially linked to you through your joint account so things like searches you have made will be visible when a lender searches her credit report.

Most BTs can be made to accounts in different names but if it's going to your joint account the name will be the same so she shouldn't have a problem with that transfer.

She could have the account in her name and you as an additional card holder. Not sure on a joint CC account if that's what you meant