Made a boob with new card help please

This is something often warned about with BT cards. Differing minimum payment calculations can cause problems with monthly affordability despite the deal being the cheapest overall way of getting rid of the debt. The figures you quote suggest you've transferred a £2400 debt and, even if you paid a constant £60 per month it would take you over 3 years to clear the debt.

If you can afford the higher minimum, I think you should go with it because, ultimately, it is better for you to clear the debt as quickly as you can. If, however, there is a danger that you won't be able to keep up with the payments at this level, you run the risk of defaulting and incurring fees and losing the 0% deal. If that is the case, perhaps another transfer to another card would be preferable (if you can get another one with a high-enough credit limit).

Something else to consider is that the minimum payment will reduce month on month. Yes, it will take years to get down to £24 per month (and you probably don't have an offer that will last that long anyway) but it will make a difference to the affordability as you progress.

Personally, I would try to pay at least £60 per month (every month regardless of the minimum requested) and stay where you are for the time being but, if that really isn't workable for you, you will indeed have to try something else.

sunshine_and_rain wrote: »

I can afford the £60 without worry of default.

Good to hear. Can I just throw a bit more information at you?

Is the HSBC offer the one with a 1.4% fee and 0% interest for 32 months with £25 cashback?

If it is - and assuming I've guessed the right amount of debt - throwing roughly £76 per month at it will clear it completely within the 32 months. If you can't manage that but can manage £60 per month for 32 months you'd only have £513 left to clear at the end. Failing that, paying the ever-reducing minimum payment will leave you with approximately £1082 left after 32 months.

Consider also, as time passes, your wealth will probably increase through things such as pay rises and, despite the fact that your other costs may increase in line with inflation, your debt won't and a payment of £60 or £76 could potentially feel less of a burden.

One final strategy to consider is something akin to 'stoozing'. You set yourself a target of £76 per month as if to clear the debt within the 0% time frame. However, you actually pay the minimum payment (£60 in month 1) and save the difference (£16). In month two (and beyond) your minimum payments drop slightly and the amounts you save increase slightly.

This has the advantage of you amassing a small amount of interest on your savings, so that you can throw it all at the remaining debt balance at the 32 month point. It has a further advantage too in that you create a pot of cash that you can call on in an emergency (although hopefully you won't need to).

Where you put the saved amount is up to you. You could save it in a standard easy-access saver paying 1.5%, or you could try to save it in a high-interest current account (TSB Classic Plus springs to mind as it has no strings - apart from the £500 min pay-in - and no published end date to the 5% rate it pays. Beyond that there are 'unlinked' easy-access regular savers you could use.

sunshine_and_rain wrote: »

That is a great help Terry Towel thank you so much! Yes your calculations are correct with my CC debt and the terms of the new card. I'll follow your advice and will be clear before the card ends. Can I ask another question please, should I cancel the TSB card now it has been cleared? I don't plan on using it, I have a Barclaycard which I make purchases on and clear in full every month. My thoughts are, if I close the TSB card account down will it help obtain another card in future (after the HSBC is finished), should I need one then? Thanks so much once again for your kind help

I'm not the best person to advise whether to close the TSB card. That said, I think you should keep it for a while; you never know, they might try to tempt you back with a 0% BT offer at some point in the future - could be very fortuitous!

Some will probably tell you to keep it because the unused line of credit it provides has the effect of making you look less 'up to the hilt' with your total credit availability - if you understand me. Others may have a different view.

Don't stress about it though.