Please help me with this balance transfer decision

Seaxwyn

Hi there, I would really appreciate views on this:

I have £4.438 on an Egg card with the 0% deal ending this month.

I have been offered the following Balance Transfer deals and would really appreciate advice on which to go for.

Sainsbury's CC - 6.95% for life of balance, with no fee (credit limit high enough to take the whole balance)

Goldfish CC - 4.9% til Dec 2010 with 3% fee (limit £3,800 so I'd have to pay some of the balance off).

Abbey CC - 12.95%!!! Are they likely to improve the offer if I threaten to close the account? Annoyingly there is a small balance on the card and they won't take payment over the phone so I can't close the account now. I've not been impressed with the service since it transferred to Banco Santander so I'm inclined to just close this card anyway.

Or... I could apply for a new card with a 0% deal but, though I have always been accepted in the past, I only opened the Goldfish card recently and need to remortgage this summer so maybe best to avoid another search on my credit record?

I have £1700 in savings, which I could use to reduce the Egg balance before transferring it, but I had planned to use it to reduce the mortgage.

Any advice very welcome! And sorry for the long post.

Bismarck

Hi Seaxwyn.

My gut feeling without doing the maths is do the free LOB at 6.95% anyway...then use the time you gain to look around and consider....in the current climate, I'd suggest that a big LOB opportunity is a great thing to have ......I'd be careful you don't lose the credit limit as stranger things have happened! Stick you transfer there while you can and keep your savings safe...there may be a time when everyone's screaming for real money!!!

Bismarck

Following on, if your savings are with you at least you can use them in tough times to pay monthly repayments - at least you'll have options also you should be able to get a decent savings rate to counter any interest you'll accrue through not paying off some mortgage/ CC debt.

Cash is king....

Seaxwyn

Thanks Bismarck.

The savings are only at 5.3% though, so below the Sainsburys LOB offer rate. My main preoccupation is that our fixed rate mortgage ends this summer (along with eight million others) so I want to hold onto the savings til I know what kind of new mortgage deal we can get. Life could be about to get much harder!

Bismarck

Suspect you could get a better rate than 5.3% unless you're locked in but that's another question....

The beauty of the LOB is the fee-free part which means you don't feel gutted if something better comes along in June or there's a change somewhere else.....plus you can apply for other cards at the best time for you...maybe if and when you close the Abbey Card...by all means see what they'll offer you as it's only the cost of a phonecall and if you need to close the account so be it.

Let us know how you get on and good luck - esp with the mortgage....

Seaxwyn

Thanks Bismarck.

The savings are an ISA with my bank, so super convenient to make instant transfers. Once I've sorted our the new mortgage I will look for better savings opportunities.

I agree... BTing to Sainsburys now doesn't rule out moving it again to Abbey or elsewhere should a better deal come up. Thanks for helping me see that!

trulymadlydeeply_indebt!

Hi Seaxwyn

My gut feeling is to grab the LOB offer with both hands - the one's I've been able to obtain recently had 3% fees, so I think you're in a win-win situation on that one. If it helps your decision even more, I was on the phone to Intelligent Finance last night and they're offering LOB deals there, but they then said the fee on 2 of the deals was a whopping 5%!!!!!! It looks like the credit crunch will be tougher than we thought for the future months.

If you have a small amount you could pay off the Abbey? (sorry, I forgot whch one you said) then I'd be tempted to clear that too by dipping into your savings, as long as you still have some remaining to use towards your mortgage later on.

At least that will give you breathing space to think about your next move.

HTH

TMD xx

Seaxwyn

Thanks trulymadlydeeply

I've also talked to abbey about our remortgage and if anyone is interested, see here: http://forums.moneysavingexpert.com/showthread.html?t=833849

Thanks again for the advice Bismarck and tmd, I really appreciate your taking the time to answer.

taxi73

answered in your normal thread

Seaxwyn

Surprise ending to this dilemma..... I got a good mortgage offer so felt I could risk an application for a 0% BT credit card - applied for the Virgin one recommended on this site and got it! With a credit limit of £8,500!

I now have six credit cards! Don't worry I'll close 3 of them straight away. I do feel really lucky though, looks like I've escaped the effects of the credit crunch, which isn't really fair.

CannyJock

Credit crunch isn't a universal problem, what's interesting is that it's selective in who it allegedly affects.