Transfer Fees!

Jo4

A friend of mine has a credit card and a limit of approx £5600. They have about £2600 on it at a rate of 5.9% for the life of the balance. They have just received an offer to transfer the remaining credit, approx £3000 to the card at a rate of 6.9% for the life of the balance BUT there is a fee of 2% on the transfer. Should I tell them to take up this offer or bin it?

PLEASE respond!

Jo4

Am I right that this should not be touched or have I read Martins article incorrectly?

YorkshireBoy

Are you saying your friend has £3K debt somewhere else, which is incurring more than 6.9% APR?

Jo4

YorkshireBoy wrote:

Are you saying your friend has £3K debt somewhere else, which is incurring more than 6.9% APR?

Yes, I think it is 21.9% or 22%+. What about the 2% fee though, thought Martin said not to touch these offers because of the fee?!

YorkshireBoy

Jo4 wrote:

Yes, I think it is 21.9% or 22%+. What about the 2% fee though, thought Martin said not to touch these offers because of the fee?!

I don't read all of Martin's articles but I wouldn't have thought he say something as specific as that. Maybe he said to be aware of the impact of the charge and factor it in?

Anyway, 2% of £3,000 is £60. However, sometimes these fees are capped at between £35 - £50.

So, the difference in APR between the deal your friend has now and the new one offered is 22 - 6.9% = 15.1% APR. This works out at around 1.2% per month. Therefore, your friend is saving money within 2 months of swapping the debt.

However, do your own research and if in doubt post back with more detail.

Jo4

Should I tell her to move the money from existing card or not?

YorkshireBoy

Jo4 wrote:

Should I tell her to move the money from existing card or not?

You have given us "snippets" from your friends offer. I have not seen or read the offer T&C's. I have given you some basic information which ought to guide her in the decision-making.

This is why I added "do your own research". You're not really going to make a major financial decision based on what a total stranger says, are you?

Jo4

YorkshireBoy wrote:

You have given us "snippets" from your friends offer. I have not seen or read the offer T&C's. I have given you some basic information which ought to guide her in the decision-making.

This is why I added "do your own research". You're not really going to make a major financial decision based on what a total stranger says, are you?

THANKS for your responses but I was wondering whether anyone else had an opinion on this. In answer to your question, yes I would make a major financial decision based on what a total stranger says!