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will I be better off with a 0% balance transfer?

(4 Posts)
basildonbond Mon 01-Oct-12 22:26:12

bear with me ... finance is not really my thing (mainly because I adopt an ostrich approach blush)

I have an M&S mastercard which was ticking along nicely - I put everything on it and paid it off in full each month, didn't pay any interest and got lots of M&S vouchers ... all well and good... until last summer when a succession of big bills meant suddenly I was £5000+ in debt

I've been paying it off at a rate of £500-£600 per month but obviously the interest is eating away at much of that so it's only going down very sloooowwwly

Would I be better off transferring the balance to my barclaycard which I never use - we've just had a 0% transfer offer come through, even though I'd have to pay a 2.9% fee or would the fee negate any savings?

any advice gratefully received

CogitoErgoSometimes Tue 02-Oct-12 07:03:05

You have to do the maths to work out if it's worthwhile and for that you might find an online calculator like this one useful. Compare the total price of paying back the money using the APR of the M&S card vs the total price of paying it back at 0% with a 2.9% fee. You also have to be very disciplined about a) paying off the 0% card before the 0% expires and b) not using that or other credit cards to make more purchases until the debt is cleared .... the two main pitfalls of balance transfer.

TalkinPeace2 Tue 02-Oct-12 13:05:43

Whatever amount you can afford to repay today (£142.76 or whatever) round it up to the nearest fiver (eg £145) and set that as a standing order to clear the debt and it will be gone in a FRACTION of the time ....
Have a look at the google docs spreadsheet I mentioned on the thread for the lady who is having problems budgeting.

0% again will only work if you FIX THE AMOUNT you repay

needsomesunshine Tue 02-Oct-12 13:28:41

This will only work if you sort out your spending habits. Otherwise your just shifting debt and burying the reasons why you got into so much debt in the first place. Been there done that too many times. Near to the end of the 0% I guarantee they will increase your limit, you'll be tempted, then they will increase your interest rate and your well and truly trapped. All those emergencies add up fast.

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