BT have I done the right thing?

jessicad_2

Hi all

I posted yesterday that I had been declined for a natwest 0% card.

So today I called Halifax as I have a card with them that has a balance of £2462 at 17.9% and a credit limit of £10,750 to see what they could offer me for balance transfer of £6,000 on two cards (17.9% and 18.9%) as well as looking at my existing balance APR.

They offered to reduce the existing APR to 15.9% which they did anyway, and offered me either 0% for 6 months on the BT, (3% fee) or 5.9% life of balance.

I accepted the 5.9% on the basis that it will take longer than 6 months to pay it off, and that in 6 mths I may still be declined of other 0% card, which would result in the APR going back to 17.9%,

Plus I now have this card on a low rate, but my Lloyds card which has a balance of around £6,000 is on 0% till june so I hope to swap that onto a different 0% at that time so I would only be trying to transfer one balance in june not Lloyds and Halifax close together

Also, I'm thinking that if I close the other two accounts then I have less credit available to me which should make my next application more likely to be accepted.

I'd welcome any thoughts, comments or advice on whether this is a sensible thing to do or any other option I should consider.

Thanks in advance
Jess

NickX

All seems to make sense, sounds like you are making progess.

5.9% LOB is a very reasonable rate especially when you think that a 0% for 6 months deal that charges a 3% fee is the equivalent of a 6% deal, but after 6 months you need to re-apply and move again.

So, it makes sense to put as much as possible on the LOB deal, and utilise the 0% deal until it expires. But remember to have a new deal in place ready for when the 0% finishes. If you end up paying the standard rate, your interest payments will rack up very quickly again.

Well Done on making the effort to get it sorted :beer:

HP_Guy

Just to clarify, your existing balance on the Halifax has been reduced to 15.9%, and you are going to transfer additional balances at the 5.9% LOB. Is this right?

I wonder if it would be worth transferring out the exisiting balance first, even to transfer it back (is this even allowed??) otherwise you are going to be paying off your 5.9% before you can touch your 15.9% - how much is this going to cost in the meantime. As you can see - I am very new to this site (though loving it so far ), so please take my words with a pinch of salt!

NickX

HP_Guy wrote: »

I wonder if it would be worth transferring out the exisiting balance first, even to transfer it back (is this even allowed??) otherwise you are going to be paying off your 5.9% before you can touch your 15.9% - how much is this going to cost in the meantime.

Very Good Point !

The existing balance will be charged at 15.9% and will remain there all the time that the BT is being paid off at 5.9% LOB.

Excellent Idea to transfer this amount off first, then see if you can transfer it back so as to get it at 5.9% LOB aswell.

This may incur some BT fees but the saving by being on 5.9% LOB should make it worthwhile.

jessicad_2

oh no, thats a really good point, unfortunately I've already done it, so would I still be able to transfer that amount that is on 15.9% or will it now come from the 5.9% pot??

My other thought is that if I close one account and get rid of it, but keep the MBNA one open but without a balance on it, then when my 0% deal with lloyds expires I can ask MBNA for a deal on the lloyds balance, as well as applying for 0% elsewhere so hopefully I should be able to get a reduced rate on the Lloyds balance one way or another when the 0% expires

HP_Guy

jessicad wrote: »

oh no, thats a really good point, unfortunately I've already done it, so would I still be able to transfer that amount that is on 15.9% or will it now come from the 5.9% pot??

I am sure that any balance you transfer away will come first from the 5.9 pot, so to get rid of the the 15.9, you'd have to transfer the whole balance, which would effectivley end the life of the balance. Will they allow you to add 'another' balance, or was it this time only?

NickX

Ah sorry Jess, I think that now you have done the BT, your existing balance is trapped at the 15.9% rate. You would need to balance transfer the lot off, then back again to get it all only the 5.9% LOB, and that could incurr too much in the way of fees.

With regard to the MBNA card, definitely keep it open with zero balance. MBNA are very good on repeats and you may well get offered a preferential rate without even asking. Naturally as it approaches the end of the 0% deal, call them up and ask what they can do for you.

jessicad_2

thanks for your advice, well I've learned something to be aware of in future anyway. I'm happy to have least reduced the interest on some of my debt anyway, and hopefully I can make sure that the Lloyds debt doesn't cost me too much at the end of the 0% deal as well.

Thank you for your help
Jess

CannyJock

jessicad wrote: »

thanks for your advice, well I've learned something to be aware of in future anyway. I'm happy to have least reduced the interest on some of my debt anyway, and hopefully I can make sure that the Lloyds debt doesn't cost me too much at the end of the 0% deal as well.

Thank you for your help
Jess

Once youve "cleared" the balance on the other cards, you could wait a few weeks and then call them back to "close" the cards and see if they will make you a better offer.

Another BT would probably have another BT fee (but not always - see the Ulstercard with 0% for 6 months with 0% fee!).

Read this article that Clariman put up on some tips to negotiate offers on existing cards:
http://www.makesenseofmoney.co.uk/a_extend.html

If you don't get a deal then definitely close the cards.

With a little bit more shuffling you might be able to bump the interest down even further

jessicad_2

thanks, that sounds like a good idea. If I can transfer the whole Halifax balance back to MBNA and maybe negotiate a lower LOB rate then it could work out cheaper even considering the BT fee's.

I'll give that a go, thanks very much
Jess