To ask if any clever people can help me? (Credit card related)

[Isbrexitoveryet]

So,
As per my previous threads in relationships and Aibu, I am leaving DP because he’s a short tempered arsehole who has spent all my bloody money.

So anyway. I have 2 credit cards in my name that I used to consolidate DPs payday loans etc on.
One is an Interest free jobby with a 4% interest rate after the interest free finished and a £40 minimum payment and it comes from my high street bank
The other is a starter credit card I have had since I was a teen with a 35 % interest rate and a £154 minimum payment

I am in a position where I can move the balance of the shitty high interest card to the high street one, they have offered me two deals, (see attached) but I haven’t got any idea which one is better.

If it helps the total balance will be about £6,200 and I will be paying between £150& £300 PCM

Any savvy people able to help?

Thanks

Brexit.

I know fuck all about credit cards but I'd go for the 2nd option of a longer deal and no extra charges on top. Gives you longer to pay more off before charges and interest going up.

If you are just going to leave it on this card, you are better off with the second option.

It will cost slightly more in the first year (4.9% v 3%) but will be significantly cheaper thereafter.

Based on the amount you plan to repay, it will take you at least a couple of years to clear so the second option will be cheaper overall.

You could do the first option and then transfer the balance again in a year but you would have to make sure you remember and would have to be accepted for a different card.

I'd take the second option then at least you know it

Do you intend to use the cards again, as my understanding is they only apply to the transfer rate not any that’s been spent.

Also £150 -300 is quite a differences. I’d go for the first one as I think it will work out cheaper in the long run

How much are you transfering as this is the figure the fee will be calculated on.

Also, can you afford to pay more than the £200 you're paying now?

won't cost you more than 5% a year.

And then I’d transfer again later.

Have you looked at other card offers I got 2; month interest free from Barclays the other day

The top offer is better if you think you can transfer the balance to another offer after 12 months.
If not, go with the second one.

What’s the interest rate on the first one after the 12 months interest free?

I'd look for a 0% Apr for 2 years, I think that may be the longest you can get and then transfer both cards. Try money saving expert he knows the best deals.

Don’t use the cards for purchases either.
Although, they did change the legislation a while back which means any payments are automatically allocated to the portion of your credit card debt which attracts the most interest.

I'd do neither and move both balances to a 0% pay £300 per month it will be cleared in 20 months. Lots of offers out there for 24 month balance transfers some with no fee. Go onto www.moneysupermarket.com and do their eligibility checker. You can transfer more than 1 card to the new card and they all get the 0% offer.

How much will the rate be after the 12 months 0%? Will you be paying the balance of within the year? If not how long do you anticipate having the debt on the card?

Like a PP you could switch to another 0% deal after the 12 months but there is no guarantee you’d be able to get another deal.

If the balance is going to be in there for quite some time I’d go 2nd option. If it’s relatively short then the first option.

I'd do something like this. But use the checker on money supermarket to see which ones you're eligible for.

If you do go for another card, OP - I can also recommend Barclaycard platinum.

It all depends on whether you'll add to that balance and how much you can afford to pay per month.
The 0% option is cheaper (£186 fee) but it will mean you'll have to find another deal in 12 months. If you can pay closer to the £300 than £150 you'll clear more than half of the £6200 balance.
The second option is better if you can't pay as much, and if you don't want to have to look for another rate in 12 months time. It's a good rate for 3 years and if you go for that you need to make sure you clear the balance in that period and don't add any more to your debt. In order to do that you'll have to pay at least £200 per month.

I hope that helps. I'm by no means an expert!

www.moneysupermarket.com/credit-cards/calculator/

This tool shows that the second option will cost you £242 and take until May 2021 to pay off at £300 a month.

It depends how much you actually pay off a month, how the interest is calculated and whether they charge you for a whole year if you hold the loan for part of it.

Looking at just the original £6200 and assuming that you pay off an average of £225 (the midpoint between 150 and 300) per month, and that you are charged the interest on the amount of the loan at the beginning of the year, you would be a bit better off with the first one (3% of 6200 + 4.9% of 3500 + 4.9% of 800 = £396.7)
Second: (4% of 6200 4% of 3500 + 4% of 800 = £420).

But that's a really rough - and inaccurate - estimate, doesn't take into account the interest added (ie 12 X 225 = 2700, so I have just deducted £2700 from the £6200 after years one and two and calculated the interest on that, but after year one the balance will be more than £3500 because there will be interest added.)

It may also be that the interest will accrue daily so it will take account of the payment each month. And you may pay off more, or less.

All these will affect the interest you will pay and thus may alter the balance between the two options. With my very rough-and-ready calculation the difference will be less than £25 over 3 years.

I would recommend you work out what you realistically think you will pay per month averaged over each year and call the providers and ask what they calculate the total interest over three years would be. They should have a clever computer calculator that can take into account the effect of interest.

How long will it take you to pay it off? Don't necessarily go for what your bank offers you do a full market search for the best one.

I was assuming you'd stay with either for 3 years, but as pp say, you can presumably move from option 1 to a lower-interest provider after one year, which would be cheaper.

A few people have suggested getting a third 0% credit card but if you already have 2 credit cards in your name it's unlikely that you will be given a big enough credit limit to transfer both balances across. Most balance transfer cards have a 3% transfer fee anyway.

As an accountant, I would recommend option 1 and pay off as much as possible within the first 12 months. Do not put any purchases on the card. As soon as the balance is transferred, cancel your second card. In 11 months time you will only have one credit card with a smaller balance so should be in a better position to apply for a new 0% card to transfer the smaller balance to.

Hi all,
DP in all his cocklodging glory decimated my credit rating, so these are the best deals I can get, I had a 0% for 24 months on the Bank credit card, which still has about 14 months left on interest free then rises to 8%
I’m hoping to use all my overtime at £500 PCM to pay it off, too so some months I hope to get it close to £800
The 0% rose to 19% after the year so I decided the best thing was the second one.

I don’t even have the pin for the card I’m transferring to. So no danger of spending on it.

Bollocks tatie wish I had seen that sooner!

If you are still with dp I'd bounce them back to card in his name.

Also approach your bank. Hey may give you better deal on a loan or overdraft

Are you sure about your credit if you're still being offered 0% deals? Use the money super market checker to make sure you cant be offered a better deal. Also dont start a thread asking for advice then make a decision before you've read all the replies