Advice needed on benefits of stoozing in my position with 30k credit card debt

lou777

I am hoping someone can help me. I have about £30k debt on various credit cards, of which Egg is £3k with 21.9% APR. It is my lowest debt and not my highest APR debt. Is there any benefit in paying that off first so I can stooze, or is it still best to go for the highest APR debt first? I could get that one cleared soonest as it is my lowest debt, and could then stooze, but I am not sure if that is the right thing to do or not.

CLAPTON

use the snowball technique.. pay off debts with highest APR first

why exactly will having an egg card with no balance help you?

try to get low life of balance cards and BT your other balances

get lower Apr CCs and BT your balances

lou777

Thanks for your input. I have used the snowball calculator, which is really good. The reason I am enquiring about Egg is that once you clear it to zero, then you can transfer a balance from your current account onto the card, then use that money to pay another card off, meaning that you get zero APR with Egg for 6-8 weeks until that starts charging interest, and then you have paid off the same amount on another card as well. If I could then clear that second card asap, then I could use that to transfer the Egg balance to it, getting it interest free for 6-8 weeks, and then use the free Egg card to transfer £3k to my current account so I can pay off £3k to another card.
I need to weigh up the benefits of doing that against paying highest APR first, and wanted anyone's advice who has taken advantage of the fact that Egg allows you to transfer debt from current accounts to its card.

NickX

For stoozing, you really need to be using 0% or very low rate Credit Cards.

You won't earn anything like 21.9% in a Savings Account, so you are better off using the funds to pay your card debt off - as recommended pay the higher APR debt first, so that the remaining debts are at a lower rate.

Why not apply for some 0% Balance Transfer cards to reduce the amount of interest you are paying or even phone your existing Credit Card companies up and see if they will reduce the rates for you.

Good Luck!

lou777

Hi. Thanks for your input. I didn't mean that I would transfer the Egg debt so that the money sits in my current account, but that it could be used to pay off another debt. I guess there is not much in the two different options, so it may be best to stick with paying off the highest APR first. To be honest, there is only a very small difference between paying off the smallest debt first and paying off the highest APR first when I did the snowball thing, so I just wondered if there was anything to gain by taking advantage of the Egg thing, as I don't think I will be able to get any new credit cards due to the size of my debt.
I will give my credit card companies a ring to see what I can do about getting the APR down. I suppose I will have to put it to them that I want to see if they can do anything for me before applying for another and closing that credit card down with them, and see if that incites any offer.
It's the interest that is the problem for me (like everyone I guess). I suppose I will be able to get some better deals once I have started paying everything off, so maybe I just need to knuckle down and wait 6 months before applying for a new card.

YorkshireBoy

lou777 wrote: »

The reason I am enquiring about Egg is that once you clear it to zero, then you can transfer a balance from your current account onto the card, then use that money to pay another card off, meaning that you get zero APR with Egg for 6-8 weeks until that starts charging interest...

I'm afraid your plan falls down here.

Unlike purchases, which qualify for up to x days interest free, balance transfers attract interest from day one until cleared in full.

Sorry!

lou777

Hi,

Thanks for pointing that out. I just wondered as I have heard talk of using Egg to help you on MSE before, and can't work out how it will help. I will try to find old posts on it I guess, as I remember reading about it and am now in a position to use it but how and why, I just don't know!!!

jinkssick

Your aim is paying these off solely, itll give you as much benefit as stoozing. Focus solely on paying your debt off because your trying to walk before you crawl.

lou777

Hi,

Yes that has just dawned on me. I need to start paying something off first and then look at it again. I have got some old Halifax cheques with promotional rates on (now out of date), so I guess I will start paying off my most expensive debt and then see if Halifax throws me any more bones for me to chew on!
Thanks

Richard019

lou777 wrote: »

Hi,

Thanks for pointing that out. I just wondered as I have heard talk of using Egg to help you on MSE before, and can't work out how it will help. I will try to find old posts on it I guess, as I remember reading about it and am now in a position to use it but how and why, I just don't know!!!

I think the Egg Money card is the one you've seen been spoken about (the Money part is important). It's only useful in the examples for people with more credit available than debts.

Say for example you had £2k on your nasty high interest credit card and couldn't afford to pay it off. You applied for a 0% BT card and found you were being given a £3k limit. Your first step would be to transfer the £2k debt onto it. But then you would have another £800-£900 available on that card for balance transfers. With normal cards that available credit would be wasted.

Using the Egg Money card though you could get that money into your bank account and then invest it in high interest savings or an ISA to make yourself money.

In your position I would be making the minimum payments on the lowest interest cards and BTing as much as possible off of the higher interest cards, even if that meant you were putting transfers onto cards with other debt on. All available money would then be used on the higher interest cards.