Transferring from one card to another

grandmother_2

I have several credit cards, but one card with a very much lower interest rate. Can I transfer small amounts each month to the cheaper card or must you be able to transfer the whole balance.

My thoughts were to transfer say 150.00 each month from the expensive card to the cheap card to reduce the balance whilst also obviously paying the card. This way I would be able to start clearing the credit cards much faster, but I am unsure if you can do this.

I would appreciate any feedback on this.

DestroyingAngel_2

Hi Grandmother, welcome to the Forum.

You can transfer whatever amount you want between cards. However, there is a slight flaw with your plan - each time you transfer any balance between cards, you'll incur a handling charge. This is normally 3% of the amount you're transferring, so that cost might effectively wipe out any benefits of moving the balance to the card with the lower rate.

You also need to check the promotional interest rates on the card with the lower interest rate. Whatever you pay off on this card will go first towards paying what's at the lowest interest rate before touching the balance at the higher interest rate. So, for example, if your lower rate card had 0% on BTs but 15.9% on retail, and you have a balance sitting there at the retail bracket, then any payments you make would deduct from the balance sitting in the 0% bracket first. So, you'd be paying interest on the balance at 15.9% for much longer than usual, if you keep transferring small sums over as BTs.

Hope this helps.

CannyJock

Using the snowballing technique (full details and a calculator to work out the saving at www.whatsthecost.com) you wouldn't transfer small amounts like this. You'll save more in interest by doing it, basically like this:

1. Transfer the maximum possible from the highest APR cards to the lowest APR cards
2. Make the minimum payments on the lower APR cards ideally by direct debit
3. Put all other funds to paying the highest APR card.

Knock them off in order of highest APR. Remember there's normally a transfer fee of around 3% for transferring a balance but this can often be worth paying for the sake of moving the debt onto a lower APR.

Would be worth considering a new 0% card, if you want to post back with the names of the cards, their balances, credit limits, APR and duration of any introductory offers then we can kick around a few suggestions for the sequence to do them in.