Clearing credit card-advice

(6 Posts)
Keepon123 Wed 02-Nov-16 15:56:21

Have £1250 outstanding on a credit card with 0% interest rate ending on 1/1/17. Hoping I can clear some of that down further with next 2 pay packets.
Other credit card is offering a balance transfer with 5% handling fee then interest free until 11/17 or a card with 4.9% interest rate (am told this equates to approx £5 interest pm).should I wait and try and bring balance down more after been paid at end of month in hope offers still available or just transfer it now?want to clear it the quickest while incurring the least interest.thanks

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Keepon123 Wed 02-Nov-16 15:57:31

Meant to say the card I am considering transferring onto is one I already have which has a balance of £0 on it then I'd close the card I've transferred from.

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SilverViking Wed 02-Nov-16 16:59:02

Couple of questions, is the 4.9% interest rate per month, or per year?
Also, how long do you think you will need to pay of the balance?

If interest rate is 4.9% per year, then it makes sense to use that card.
If it is 4.9% per month, then it would be cheaper to pay the 5% admin fee, and hopefully have the balance paid of before the 0% rate finishes.

Keepon123 Wed 02-Nov-16 21:12:46

Hoping to clear the remaining £1250 well within interest free period -i.e. within next 6 months,person on phone at bank stated 4.9%apr,quoting approximately £5pm interest in balance of £1250.
Couldn't get a straight answer from bank who current balance is with as to what their apr will be at end of 0% period but sure it will be a lot higher!thanks

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SilverViking Wed 02-Nov-16 21:43:53

Ok, so £5 per month looks like 4.9% for year... So makes more sense to use this, as you are paying of the outstanding balance your interest will get less each month (it will be one twelfth of 4.9% of balance remaining that month), so you will end up paying much less than 4.9% of the full £1250

If that makes sense!

Keepon123 Thu 03-Nov-16 14:02:40

Thank you silver - yes makes complete sense-will try and clear more at end of this month then balance transfer remaining balance to the 4.9% offer.

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