HUGE (£21k) Balance Transfer...

_-*Sally*-__3

This is my first post !
We (my dh and I) have decided we absolutely have got to sort out our finances and I have been looking on here for a couple of days now and the dimmer switch on my "lightbulb" is now being turned up!

So our current status!
- we have about 20k left on a 25k loan
- we have 21k on a credit card (MBNA)

The loan is Northern Rock - and a pretty reasonable rate (we have 3 yrs to go)

SO decided we would transfer the balance on the credit card over - but the balance transfer offers seem only to be good for up to £5k, and reading the credit card bit - it does seem MBNA is a good ish one to have....

MY QUESTION IS THIS......
Would you consider getting 4 new credit cards all with 5k balances for 0%?
(I realise this may be a hassle and having never transferred a balance before I dont even know if you can transfer a bit of a balance!!!)

OR would you leave it as it is? (all on the MBNA one)
(when I say leave it as is - I am about to got and show my face on the DFW board -as that is our ultimate intention!)

OR do you know of a CC which you CAN transfer the balance onto?


I think our credit rating is pretty good - although we are just in the process of amalgamating 3 current accounts into one - so that might affect it I suppose.......


THANK YOU :)

chappers

You can transfer as much or little of a balance as you want, but your new card with a £5k limit might not let you transfer the full £5k also they will make a percentage charge for transfering the balance.

Gorgeous_George

You usually pay around 3% to transfer the balance. So transfer £21K to 4 or more cards and you can expect to pay £630 or thereabouts.

If the balance transfer interest free period is more than six months, this can be worthwhile but, in reality, it only buys you some time. When the interest free period expires you need to find new cards to transfer the balances to. This is fine providing your credit remains good and the CC companies continue to offer BT deals. It's unlikely that you will be out of pocket if further transfers are not possible because you are already paying a hideous rate of interest.

Another option may be to take a loan to cover the debt at a much lower rate however, you may also be able to negotiate a better rate from MBNA - but I doubt it.

If my calculations are right, at 1.9% per month (is that about right?) and paying £500 per month, your card will take 13 years to clear. A bank loan of £21K repaid at £500 will take just over 4 years at 7%. A saving of over £50,000!

Tackle debts with the highest interest rates first!

Good luck.

GG

_-*Sally*-__3

Thank you for your replies

I think a flexible loan has probably got to be the way forward... will pay less than the CC and get it paid off asap.....

Have just updated on the Debt Free Wannabee bit - but basically we are getting there now - or at least have made a start :)