0% or low % for life balance

chrisski

I have 800 overdraft, 2,000 credit card debt and a wedding to pay for in a month plus trying to sell my property. i have been offered a 0% til jan 09 by virgin where my halifax card is offering 5.8% for life of transfer balance.I want to pay overdraft off and transfer my current credit card debt to another card but not sure if i should put it on my virgin or halifax card bearing in mind i wont be paying it off by next january. what do people suggest?

GeorgeUK

For me that would depend on the limit you have available.

Debt:
800 overdraft
2000 CC

available to transfer:
0% 6 months Virgin: £x
5.8% LOB Halifax : £x

Who is your current CC with?
Does the Virgin card have a 0% balance?
Have you had late payments with your current card?

When the 0% deal has a month to go, you could contact your current card provider and see if they will offer a 0% deal as incentive for you to keep the card. If your credit rating is not so good and you may not get offerred another 0% deal then it may be best to put most of the debt onnto the LOB card.

Don't forget to look at the difference in minimum payments and make sure that you can cover them.

chrisski

my current cards are barclays which has £1800 at 0% til march 2009. I have a m&s more card with £384 at 14.9%. have a £300 on my halifax one card at 0%. my virgin and mint have no balances.

ive just had a letter from barclays offering 0% til march 2009 with 2.5% charge or life balance of 6.9% with no fees if i transfer by end of july.
halifax are offering life balance at 5.8% with fee of 2.98% . virgin have offered me 0% with 3% fee til jan 09.
my overdraft was at 850 last month and i have just had to spend £750 on getting car fixed with further 336 needed to sort air con out!
i have £5000 in savings but i get married next month and need this for that! i am also selling my flat and probably need to remortgage as current fixed rate comes to end at end of july so i dont want to do anything to jeapodise my remorgtage application!
so not sure if going 0% or life balance best as have 2 kids to support so know i will be unable to pay off all by march 2009

Poosmate

Hi Chrisski and welcome to DFW on MSE.

I think if I was you I'd put the overdraft and the £384 (m&s more card) onto the Halifax 5.8% LoB card as they are the two debts you have that you'll be paying the most interest on (assuming you haven't got one of those A&L current accounts with 0% overdraft) and you won't be able to pay it off before the end of the 0% deal.

It might be an idea also, as you are thinking about remortgaging, to close the Virgin and Mint cards. This will tidy up your finances and will be better viewed by any prospective lender as I'm sure they look at what credit you have available to you when deciding whether to lend to you and if so at what rate. And afterall, Virgin are not offering you anything that you are not already getting from your Barclays card.

If you are playing the "card tart" game (applying for CC's with 0% deals each time your current deal runs out) then closing accounts is a must because many CC's are issued by the same parent company so you wouldn't be classed as a new customer. Having said that, I think the CC issuers have wised up to this because I am getting offers from MBNA to transfer balances on 0% deals. I guess this is to retain your custom and to save them a few bob in admin costs having to continually open new accounts every time one of their competitors 0% deal comes to an end (I don't know).

Also, regarding the air con, is it absolutely necessary for you to sort it out now? Can you suffer by driving with the window slightly open or the air vents open for a few months? By which time it will be coming into autumn and maybe getting cooler again so you won't need it anyway (although nowadays it's getting harder to recognise seasons we just seem to have weather and then it could be hot, cold or anywhere in between whether we are in December or June!). At least this will save you a bill of £336 and do you realise that using your air con also uses more fuel?

Can you pay off the £300 on your Halifax card before that 0% runs out?

Oh and one more question, do you know what credit balance you will have available to transfer to the low LOB cards? I ask this because I have recently applied and got a Barclays 6.3% LoB card to which I was going to transfer £2k but they only gave me a credit limit of a disappointing £850 of which I could only transfer £765. Still, it will save me a couple of hundred quid in interest.

Hope some of this helps and sorry if I've confused you further with the questions I've asked.

Congratulations on your wedding and hope all goes well on your big day.

Poo

Clariman

I have developed a Balance Transfer Calculator that helps to assess how much someone will save by moving a debt to another card. If you plug in your figures (one card at a time), it should be able to work out which would be better.

Clariman
Disclosure: This calculator is on a site that I run as a hobby (as is the SOA Calculator). MSE sponsors the other site that I run but not this one

chrisski

ok! still bit confussed but will hope for more advice