Best Balance Transfers Discussion Area

SingaporeGirl · 10 January 2008 at 12:28PM

I'm young and learning about credit cards....rather foolishly.

Basically, last August I transferred a balance up about £500 onto a Virgin Credit Card which is 0% till Aug 2008. I also had 0% on purchases till Oct 2007. I stupidly overlooked this and have made about £300 of purchases up until this month. Now I understand that my repayments will be biased towards clearing the cheap debt first. I believe I am charged 15.9% on the purchases I made

What is the best thing for me to do?
1) Keep making the monthly payments
2) Can I transfer this balance again onto another 0% card (and remember the rule not to make any purchases on it!)
3) Pay off the full balance with money I have saved in an Yorkshire Building Society e-ISA (I don't really want to touch this as it was a gift from a relative that passed away)

Moggles_2 · 10 January 2008 at 4:47PM

Originally Posted by sammy452
I have a Barclaycard with £3500 on it (limit £5600) and Halifax with £3800 on it (limit £7900). I am paying 26.75% interest on Halifax, so really want to get rid of this one. Spoke to Barclaycard about tranferring Halifax [debt] at 6.9% life of balance but [Barclaycard]will only increase limit to £7000.

You don't mention the interest rate you are paying on the £3500 balance on your Barclaycard, but please be aware that unless you clear this debt first, you will be saddled with this high rate for the duration of the 6.9% life of balance deal. If, as I suspect, the interest rate is variable, it could get as expensive as your current Halifax card :eek:

Barclaycard suggested transferring all monies to Halifax and then transferring back to Barclaycard to take advantage of 6.9% for total debt. This sounds too good to be true and wondered whether I will come unstuck down the line, if I take this route?

Will Barclaycard charge a balance transfer fee to transfer everything back? If not, this strategy is sound in principle and avoids the above predicament.

Please note: Barclaycard restricts balance transfers to 90% of the credit limit so, as things stand, you would be left with approximately £1000 to pay off yourself. You'll also need to factor in the cost of the Hally's handling charges.

Moggles_2 · 10 January 2008 at 4:52PM

Originally Posted by sammy452
I am a housewife so have no big income, therefore can't apply for other cards, as far as I am aware?

I wouldn't rule out this possibility entirely. Have you considered the Marks & Spencer &More card, for instance? I ask because the marketing of this card seems to be aimed at ladies and I seem to remember the application asks for household income rather than salary.

The current deal offers fee-free balance transfers at 7.9% p.a. for two years. You can request your BT(s) at any time up to 6 months from account opening but, once done, remember not to spend on the card

Moggles_2 · 10 January 2008 at 5:45PM

Jo4 wrote: »

Sorry, forgot to say that they are upping their payments in May by £300 a month and then they are upping them again in September by another £320 a month. Does that make any more sense?

I must attempt to find out how much they could save.

The potential for misunderstandings is all too evident.

Why not experiment with Martin's Minimum Repayments calculator, as I've suggested? That way you can plug in whatever combinations of numbers your friends come up with and compare the results with repayments on a 0% balance transfer card.

sammy452 · 10 January 2008 at 6:08PM

Moggles

Thank you so much for taking the time to answer. I had not thought about the balance transfer fees that I could be charged and will now take this into account.

The M & S card sounds interesting, however I suspect it will take me longer than 2 years to clear the debt.

Do you happen to know how many cards can be applied for before it affects a credit rating as I have a good rating and don't want to affect it.

Hopefully I will be able to reduce this debt somehow.

Moggles_2 · 10 January 2008 at 11:57PM

bram01 wrote: »

Thanks for the new article. There's just one part I must take issue with:

Surely if the debt is 0% then the best action is to pay off the minimum amount each month and put the rest in a high interest savings account until the end of the 0% deal*. That way you can earn money on your debt thus reducing it further. Plus, if you pay tax but have a flexible or offset mortgage, use that instead to reduce the amount of mortgage interest you pay, which is then tax free. At the end of the 0% simply drawdown the over-payments to clear the card debt.

* I know you mention stoozing in the linked article, but surely it applies even if you're trying to clear an old debt too.

Well, depends on your audience, doesn't it? If you're struggling to clear an old debt, "the rest" may not amount to very much.

Bear in mind that the reason card providers can afford to lend us money interest-free for anything up to 15 months is because, more often than not, customers make the minimum payments required, fail to clear their debts and end up paying extortionate interest when the promotion period ends. This is the main way lenders claw back the cost of these promotions. (If this were not the case, those 0% BT offers would have dried up long ago.) IMO, the advice to pay off more than the minimum required is the most important message to take on board.

Also, there's a limit to the information new readers (and MSEs who are new to credit cards) can digest in one article. There's plenty of info about the technique you describe on the main site, if you follow the links. This subject is raised regularly here on the credit card boards as well.

It's hard to be all things to all people but, personally, having read thousands of posts on these boards, I think Martin has got the balance of this article about right

Moggles_2 · 11 January 2008 at 12:11AM

Originally Posted by Arbie
My 0% period on two cards ends in mid-March (bad planning, I know!) - HSBC and Virgin.

I also have a Halifax card, which I took out in October 07 for the 0% on purchases for 15 months deal, with £2k on it. This money is presently sitting in my savings account garnering some interest.

My ideal situation would be to pay off the Halifax card with the earmarked funds, and use this as leverage for them to alter my deal to the 15 months at 0% BT deal mentioned previously in this thread - this saves me applying for a new card (and indeed, possibly two, given the size of my debt); and as I aim to pay it off in 13 months, would be the last BT (the Halifax credit limit will cover my BT debt in full). Does anyone have any hints or tips as how to best twist Halifax's arm into letting me run with this plan?? How do I appear a valued customer to them when I'm asking to move a debt to them?

IMO, you're pushing your luck, TBH.

The Halifax Purchases card was a market-leading offer aimed at drawing in new customers in the run-up to the Christmas spending spree. The latest balance transfer deal, launched last Monday, 7 January 2008, is a table-topping offer designed to lure new customers in the cash-strapped months post Christmas and January sales.
Why would the Hally offer two of its best buys to one and the same customer?

Provided that you've made no other credit applications in the last three months (include here catalogues, mobile phones etc., not just credit cards), I would go for a new BT card. It's not as though there's a shortage of 0% deals for new customers.

Have you considered the Egg card, for instance? The current deal offers 0% balance transfers for 15 months. There's a 3% handling charge

Moggles_2 · 11 January 2008 at 12:13AM

Originally Posted by SingaporeGirl
Last August I transferred a balance of about £500 onto a Virgin Credit Card which is 0% till Aug 2008. I also had 0% on purchases till Oct 2007. I stupidly overlooked this and have made about £300 of purchases up until this month. Now I understand that my repayments will be biased towards clearing the cheap debt first. I believe I am charged 15.9% on the purchases I made

What is the best thing for me to do?
1) Keep making the monthly payments
2) Can I transfer this balance again onto another 0% card (and remember the rule not to make any purchases on it!)
3) Pay off the full balance with money I have saved in an Yorkshire Building Society e-ISA (I don't really want to touch this as it was a gift from a relative that passed away)

If I were you, I'd go for option (2). Which card's best will depend, to some extent, on those you currently hold. 0% balance transfers are available for 15 months from Egg and Halifax at the mo. A 3% handling fee applies.

Arbie · 11 January 2008 at 1:41AM

Moggles,
Thanks for your reply. I should have mentioned in my post that my intention was to relinquish the 0% on purchases deal in return for the BT deal. I actually spoke to them today, and although they said it was an unusual situation (and that they only offer new deals after 6 months of having an account), that they would consider it. However, they also suggested that I pay the card off; cancel it; and re-apply for the new one. Obviously, this isn't in my interest, - as you've mentioned, other banks are doing similar deals. My primary concern is the amount of credit I have available, which is as follows, and it's effect on an application for further.

Virgin: £14300 limit, £3000 balance
Smile: £7400 limit (used for day-today, paid off every month)
HSBC: £9000 limit, £6000 balance
Halifax: £9250 limit, £2000 balance

The Virgin and HSBC cards are the one's I'm looking to transfer. Virgin has been traditionally good for deals for exisitiing customers, so I definitely want to keep it long-term; however, it doesn't getaway from the fact that all this credit will show on my file when I apply for a new card!
As regards other credit, there have been no applications since August when I applied for the Halifax card.

jeledaka · 11 January 2008 at 10:16AM

Please help.
I am new to this part of the site. I ahve had the same cc for the last few years and never changed so have no idea what to do, look for etc.
My Lloyds Tsb credit card has a limit of £2400 and I owe £2320 They have just put up my interest rate from 20% to 26.5%.
I am a housewife so little income of my own.
If anyone has any advice, suggestions I would be very grateful.

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