Should I balance transfer?

rosiedee

At the moment I have £4500 on my MBNA card at 19.9%. I also have an Egg card credit limit £6900 with a balance of £5100 at 5.9% life of balance. They are currently offering me a balance transfer of 1.9% until August, which means I could transfer about £1600 or a little more to my Egg card. I have tried applying for another card with a LOB but was declined. Would it be worth doing this? Also I have two loans which finish in May and June which will free up just under £400 which I can then throw at the cards. Any advice would be gratefully received.

missile

From what little info you give, it seems unlikely you clear the MBNA card balance quickly and a BT would reduce the rate you are paying.

I guess you don't need me to tell you that you urgently need to reduce your spending?

rosiedee

I have to say I found your reply unhelpful and almost hostile, most folk on this website are helpful not judgmental.
Just to clarify my situation, I have been on a debt free path since May and have already cleared quite a bit of debt. I have not used a credit card since that date. My aim is to get the interest rates down as low as I can in order to clear my debts quicker.

ajaxgeezer

I'm by no means wise on these things so please don't take this as gospel, but.......

I guess it depends in which order Egg would pay off your balances on the card. If they paid off the highest rates first then it seems that your repayments would only go to paying off the existing £5100, which I'm presuming is at their standard rate? If this was the case, as you probably wouldn't clear the existing £5100 before August then you wouldn't even begin to pay off the new £1600 which you've transferred, meaning that you would make things worse by adding a balance transfer fee to the existing debt. Only if Egg's rate was much better than the 19.9% from MBNA would this be of any use.

On the other hand, if Egg use your payments to pay off the lowest rates first then it seems sensible to do a balance transfer. If the BT fee is 3% though, then over six months that is like adding 6% to the 1.9%, if you see what I mean, so while the 1.9% looks great, it isn't as good as it could be. Still worth doing though, especially if Egg's basic rate is better than MBNA's.

Without knowing the order in which the constituent parts of the balance are paid off and without knowing the current rate you pay to Egg, it's impossible to answer.

One thing to definitely do though is to call MBNA and tell them you are considering transferring all or part of your balance to another card - this should hopefully get you a rate reduction.

gordylad

I think it would be wise to balance transfer but you need to take the hit with regards the transfer fee.

I noticed on quidco there is a couple of decent deals offering cash to switch and low interest rates for 1 year.
Goldfish 41 pounds cashback
The Goldfish credit card offers a hugely competitive typical 12.9% APR(variable) on purchases, plus 4.9% p.a. on balance transfers fixed for 3 years from the date you open your account. Balance transfer fee - 3% (minimum £3)

Natwest 24 pounds cashback
% interest on balance transfers and purchases
Stop paying interest on other credit and store cards. Transfer your outstanding balances to a NatWest Credit Card today and we won't charge you a single penny in interest for 13 months.
There's just a 2.5% fee when you transfer a balance during the first three months from account opening, with a minimum fee of £5.

missile

rosiedee wrote: »

I have to say I found your reply unhelpful and almost hostile, most folk on this website are helpful not judgmental.
Just to clarify my situation, I have been on a debt free path since May and have already cleared quite a bit of debt. I have not used a credit card since that date. My aim is to get the interest rates down as low as I can in order to clear my debts quicker.

Sorry that you got the wrong impression. What I said is in no way judgemental. Many very nice people get into debt, sometimes through a series of very unfortunate events. Others simply spend beyond their means.

MABLE

rosiedee wrote: »

I have to say I found your reply unhelpful and almost hostile, most folk on this website are helpful not judgmental.
Just to clarify my situation, I have been on a debt free path since May and have already cleared quite a bit of debt. I have not used a credit card since that date. My aim is to get the interest rates down as low as I can in order to clear my debts quicker.

I am sure no offence was meant but often the truth is a very bitter pill to swallow. We all need a reality check at sometime. Obviously the poster did not know you had already received yours.