My credit card debt situation...

Rochdale_Guy

[glow=red,2,300]OOPS ! [/glow] :-[

Letter came in the post this morning from CAPITAL ONE offering me 1.94% APR on balance transfers until May 2004.

Not what I was hoping for though

Any use to me do you think ? Anyone ?

Don't forget I am currently on the A&L deal also....

Rochdale_Guy

Current standings (!)

NatWest visa =  £780 @ 5.9% APR fixed until paid off.
American Express Blue = £1,500 @ 4.9% APR fixed until paid off.
Alliance & Leicester visa = £225 @ 3.9% APR fixed until March 2004 .

Barclaycard Gold = ZERO balance.
Capital One visa = ZERO balance.
MBNA visa = ZERO balance.
Tesco visa = ZERO balance - account now closed.

Total owed = £2,505 (still a long way to go though !)

westernpromise

Hi RG,

There's only one way left for you to finesse your position further.

This is to work out, first of all, what you reckon you can pay off between now and May 2004 in addition to making the minimum payments.

Let's say that's £500.

You could then transfer that amount from your NatWest card, which is your dearest, to your Capital One card, which is - for the next six months - the cheapest.

This will reduce the interest bill on that £500 from NatWest's 5.9% to C1's 1.94%, saving you about a tenner. It's only a tenner, but it's your tenner.

The risk in doing this is that you may not manage to clear the whole £500 transfer in those 6 months. If that happens, whatever's left starts to cost you at C1's normal interest rate. This is why you should only transfer whatever you are sure you can afford to repay before that kicks in.

WP

Rochdale_Guy

Thanks for that.

Good suggestion re: the Capital One balance transfer offer but I get real confused real easily (!) as I already have £225 owing on the Alliance & Leicester visa @ 3.9% APR (until March next year).

If I moved money onto the Capital One card @ 1.94% until May 2004, then what would I pay off / clear first then ?

The highest rated NatWest card still ?

I doubt I'll clear that in 6 months so then I'm up the creek as the A&L offer will have also shot up

??? ??? ???

Rochdale_Guy

Yes, I could say move £300 off the NatWest card onto the Capital One offer, but like I said above.... what is my new priority re: paying off my debts ?

Just as I seem to take a step forward, I take 2 back

Andrea

Hi Rochdale Guy

On another thread you say you have £500 in a savings account. Are you saving that for something specific? To be honest, if you're not rather than looking at a new account the best "savings" you could gain would be to use it to pay off a chunk of your Natwest card. You could then do as Western Promise says and transfer the remaining amount (around £280?) to the A&L card provided you know you will be able to pay this off by March.

I don't know what percentage your minimum payments are on these cards but say they're 3% of the balance. In this case paying £500 off the Natwest card will have reduced your monthly payment by around £15 which you can use to pay off extra on the remainder and then on other cards.

Andrea

westernpromise

RG,

What you're probably having trouble with is the fact that some of the rates you're on are only temporarily low, like the A & L one.

This makes it tricky to think through, but as I see it, you have a choice of 2 things you can do here. The good news is, both of them will save you some money.

Here's the scoop.

Once the low rate deal expires, the A & L becomes the most expensive of all your cards.

So what you need to do there is make sure there isn't a balance left on it by the time they switch you to the higher rate.

Which means you pay the A & L off first even though it is at the moment the cheapest rate - because it won't be for long.

Once that's done, you attack the next-most expensive rate, which is your NatWest card.

Then along into all this comes Capital One with their 1.94% deal. So what to do? Well, the same logic applies here as to the A & L deal: transfer from NatWest to C1 whatever you can afford to pay off by the time their cheapo deal ends.

In doing that you need to remember that you're already trying to pay off your £225 A & L balance.

So if you reckon you can pay off £500 in total over the next 6 months (just using the example I gave before), £225 of that is already committed to A & L.

That says you could transfer £275 to C1. Your £500 will now go to A & L and C1, so that you'll owe them nothing by the time they ratchet the rate up.

You can then focus on clearing the NatWest balance, which you have shrunk by the transfers to A & L and C1.

If you can't pay back more than the £225 you owe A & L - switch the A & L balance to C1. You still have to pay it off within 6 months, but this way, you halve the interest rate.

So to sum up:

If you think you can pay off more than £225 over the next 6 months, transfer whatever that extra amount is from NatWest to C1 and make sure you do pay it off.

If you think you'll have a problem paying off much more than the £225 you owe A & L over the next 6 months, transfer the A & L balance to C1. This gets the rate on that portion of your debt down another 2% and doesn't lock you into trying to repay too much before the cheap rate expires, because you're now paying C1 what you had planned to pay A & L anyway.

hth

WP

Rochdale_Guy

Hi again you two

Please forget the £500 I have to save / invest in my other post. That isn't a part of the equation, that's for my other half and me to put "away" for a rainy day so please forget that !

Rochdale_Guy

westernpromise, cheers for the ever helpful sensible post you made.

I will re-read it and take stock of your wise words when I come home from work tonight, thanks !

You're right in that I AM getting confused over these limited offer low APR balance transfers I wanna take part in ! :-/

Travelqueen

Rochdale Guy - Sounds to me like you're doing OK. I know what you mean about being in temp work, and not knowing one week to the next how much you're going to earn. I've been doing this since January in London whilst desperately searching for a new job and it sucks!

I currently owe about 6/7,000 - £1000 on 0% life of Balance Barclaycard, £2000 on 0% Egg (runs out end Jan), £2000 on cahoot - 12.9 APR?and about £2000 on overdrafts (at Lloyds - yes, I know.) I've just been pre approved for a 6mth 0% Lloyds card though for £5,500 and am thinking of sticking the cahoot, overdraft and as much as the egg card as I can fit on that when it comes through. I'm then going to cross my fingers and hope I get a job for xmas. At least I'll have finally paid my student loans off in April, that'll be £100 less going out of my account every month..

I've tried applying for A&L 0% overdraft, but got rejected, has anyone got any other ideas?

Sorry to hijack your thread, I'll stop squatting if you want!

Have a good wknd y'all
TQ