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  • FIRST POST
    • westy_1981
    • By westy_1981 19th Sep 19, 6:47 PM
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    westy_1981
    Which balance transfer option is best? Fee or not to Fee . . .
    • #1
    • 19th Sep 19, 6:47 PM
    Which balance transfer option is best? Fee or not to Fee . . . 19th Sep 19 at 6:47 PM
    Hi, wondering if anyone can help with the following;


    Looking to transfer approx. 1k via balance transfer to an existing (dormant) CC that I haven't used in a while.


    Transfer options are;


    1) 0% interest p.a. over 24 months with a 3% fee


    2) 4.9% interest p.a. over 36 months with a 0% fee


    3) 0% interest p.a. over 9 months with a 3% fee


    What is the best option? I can pay it off with required DD per month at the required amount to complete payment of total balance within the 9 / 24 / 36 month timeframe. . .


    Which one will cost the least? or makes the most sense and why? (Calculations would be much appreciated)


    Thanks in advance
Page 1
    • Willing2Learn
    • By Willing2Learn 19th Sep 19, 6:52 PM
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    Willing2Learn
    • #2
    • 19th Sep 19, 6:52 PM
    • #2
    • 19th Sep 19, 6:52 PM
    I believe that option 1 and 3 will save you the most money, as the percentage paid on the balance is lower (3%) as opposed to 4.9%. But then math ain't my best subject...
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • YorkshireBoy
    • By YorkshireBoy 19th Sep 19, 7:09 PM
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    YorkshireBoy
    • #3
    • 19th Sep 19, 7:09 PM
    • #3
    • 19th Sep 19, 7:09 PM
    Why have you even bothered with option 3? Surely you know that option 1 is better than that...its nearly 3 times the duration of option 3 for the same fee!
    • westy_1981
    • By westy_1981 19th Sep 19, 7:13 PM
    • 71 Posts
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    westy_1981
    • #4
    • 19th Sep 19, 7:13 PM
    • #4
    • 19th Sep 19, 7:13 PM
    Why have you even bothered with option 3? Surely you know that option 1 is better than that...its nearly 3 times the duration of option 3 for the same fee!
    Originally posted by YorkshireBoy


    Appreciate that - and assumed it was but why wouldn't I give all the options when asking for advice . . . . .
    • Ben8282
    • By Ben8282 19th Sep 19, 7:18 PM
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    Ben8282
    • #5
    • 19th Sep 19, 7:18 PM
    • #5
    • 19th Sep 19, 7:18 PM
    Why do you want to do a balance transfer to a dormant account? The term dormant implies that the card has no balance and is not being used. Why do you want to put this account into credit? This will be against the terms and conditions of the card and may well result in the balance transfer being returned and the account to which the transfer has been made being closed.

    Leaving aside the question posed above, if you repay in full quickly, say within 7 months at the very most, then the 0 fee 4.9% APR option is best. Otherise the 3% fee, 0% APR option.
    Last edited by Ben8282; 19-09-2019 at 7:22 PM.
    • YorkshireBoy
    • By YorkshireBoy 19th Sep 19, 7:19 PM
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    YorkshireBoy
    • #6
    • 19th Sep 19, 7:19 PM
    • #6
    • 19th Sep 19, 7:19 PM
    Appreciate that - and assumed it was but why wouldn't I give all the options when asking for advice . . . . .
    Originally posted by westy_1981
    Because it could so easily be discounted.

    A question for you...if you take option 1 what's the total cost? So that's the initial debt and the fee added together.
    • westy_1981
    • By westy_1981 19th Sep 19, 7:21 PM
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    westy_1981
    • #7
    • 19th Sep 19, 7:21 PM
    • #7
    • 19th Sep 19, 7:21 PM
    Wasn't aware of that - so it may be worth spending in advance of transfer to avoid conflict with T&Cs? Or ring up the bank and simply ask . . . .
    • Ben8282
    • By Ben8282 19th Sep 19, 7:24 PM
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    Ben8282
    • #8
    • 19th Sep 19, 7:24 PM
    • #8
    • 19th Sep 19, 7:24 PM
    Wasn't aware of that - so it may be worth spending in advance of transfer to avoid conflict with T&Cs? Or ring up the bank and simply ask . . . .
    Originally posted by westy_1981
    Ask what?

    If the card that you wish to do a balance transfer to has a nil balance you should not do a balance transfer to it. Why would you wish to do such a thing?
    • YorkshireBoy
    • By YorkshireBoy 19th Sep 19, 7:24 PM
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    YorkshireBoy
    • #9
    • 19th Sep 19, 7:24 PM
    • #9
    • 19th Sep 19, 7:24 PM
    Why do you want to do a balance transfer to a dormant account?
    Originally posted by Ben8282
    The OP means an empty, unused card, which has the offers on it...i believe?
    • YorkshireBoy
    • By YorkshireBoy 19th Sep 19, 7:25 PM
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    YorkshireBoy
    There appears to be some confusion here regarding TO and FROM.
    • Ben8282
    • By Ben8282 19th Sep 19, 7:30 PM
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    Ben8282
    The OP means an empty, unused card, which has the offers on it...i believe?
    Originally posted by YorkshireBoy
    Possibly yes.
    Was confused by the inclusion of option 3 though.The choice of offers 1 and 2 on the same card makes sense - typical Lloyds offer although the 24 months is very good for an exisating customer offer at the moment - but the inclusion of offer 3 from the same card is very strange so it made me believe that there was a choice of cards from which the BT could be made.
    Please clarify OP.
    • Willing2Learn
    • By Willing2Learn 19th Sep 19, 7:33 PM
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    Willing2Learn
    ...so it made me believe that there was a choice of cards from which the BT could be made.
    Originally posted by Ben8282
    I also assumed there was a choice of promotional new cards as opposed to a choice of offers on the same existing card.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • westy_1981
    • By westy_1981 19th Sep 19, 7:33 PM
    • 71 Posts
    • 6 Thanks
    westy_1981
    The OP means an empty, unused card, which has the offers on it...i believe?
    Originally posted by YorkshireBoy

    This - thanks YorkshireBoy


    I have a CC that I haven't used in some time (dormant was prob the wrong word) - it has no debt on it. I have offers from the bank on the 'empty' card and rather than use savings to pay off current CC - I'm wondering if it makes more sense on the 3% fee or the 0% fee + 4.9% pa offer if I can pay it relatively quickly (eg 6 months)
    • Ben8282
    • By Ben8282 19th Sep 19, 7:36 PM
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    Ben8282
    Thanks for clarifying.
    If you are sure you can repay within 6 months take the 0 fee 4.9% APR offer.
    • westy_1981
    • By westy_1981 19th Sep 19, 7:38 PM
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    westy_1981
    Thanks for clarifying.
    If you are sure you can repay within 6 months take the 0 fee 4.9% APR offer.
    Originally posted by Ben8282


    Thanks Ben - am I right in thinking that if I take the 0% fee option and 4.9%pa and pay it all off in under 12 months then I wouldn't incur any interest?? Or have I got it wrong?
    • YorkshireBoy
    • By YorkshireBoy 19th Sep 19, 7:42 PM
    • 30,974 Posts
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    YorkshireBoy
    This - thanks YorkshireBoy


    I have a CC that I haven't used in some time (dormant was prob the wrong word) - it has no debt on it. I have offers from the bank on the 'empty' card and rather than use savings to pay off current CC - I'm wondering if it makes more sense on the 3% fee or the 0% fee + 4.9% pa offer if I can pay it relatively quickly (eg 6 months)
    Originally posted by westy_1981
    If you have the savings then it's really easy. On the 2 year deal can you make more than 30 interest on an average 500 balance? 15 per year...do you even want to bother? Unless you only have 1K savings to your name I'd pay it off.
    Last edited by YorkshireBoy; 19-09-2019 at 8:51 PM.
    • Ben8282
    • By Ben8282 19th Sep 19, 7:45 PM
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    Ben8282
    No.
    You will be charged interest at 4.9% APR from day 1 if you take the 0 fee 4.9% APR option..
    If you take the 3% fee offer you will not pay interest for 24 months but will pay a fixed fee of 3% of the amount transferred, which is 30 if you transfer 1000.
    The trick is to determine the point at which the interest payable at 4.9% APR will reach 30 and, if you take this option, repay the balance before the.30 interest amount is reached which will be approximately after 7 months..
    • Terry Towelling
    • By Terry Towelling 19th Sep 19, 7:46 PM
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    Terry Towelling
    It all depends how much you intend to pay off the debt each month and whether your overall strategy is to be debt-free asap or whether you intend to pay very little each month and then seek a further BT offer at the end of the promotional period.

    Options 1 and 3 will cost you 30 in total, as long as you clear the debt in the promotional period.

    Option 2 is more difficult to assess. If you wanted to clear the debt over the full 36 months, it would mean paying about 30 per month and you'd incur approx. 77 in interest charges.

    Going back to Option 1, if you were to clear the debt within the 24 months @0%, you'd have to pay about 43 per month.

    If you took Option 2 and paid the same monthly amount (43), you'd have the debt cleared in about the same time as option 1 but at a cost of approx. 52.

    If your intention is to pay as much as you can as quickly as you can, and if you can afford upwards of 78 per month, Option 2 will be best because the interest burden will be less than 30 and the debt would be gone within less than a year.

    NB - all figures are approximate - and my maths is not guaranteed.
    • westy_1981
    • By westy_1981 19th Sep 19, 7:54 PM
    • 71 Posts
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    westy_1981
    @Terry, Ben, Yorkshire - thank you - very helpful - appreciate your help
    • Ben8282
    • By Ben8282 19th Sep 19, 8:01 PM
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    Ben8282
    To be honest, as we are talking about a relatively small amount of money here for the fee (30) and as 24 months 0% APR with a 3% fee is an exceptionally good existing customer offer at the moment, in your place I think I would be very tempted to go with option 1 and not have to worry about paying more if for any reason I could not clear the balance within 6-7 months.
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