To transfer credit card debt across to a 0% balance transfer card?

[heyjudena]

I currently have around £5,700 in credit card, broken down as follows:

£3,126.95 on a 36 month 0% card. I’ve had that for about 18 months. (Tesco)

£2,549.70 on a 15 month 0% card. That one runs out in October. (MBNA)

I got offered a 36 month 0% card with Barclays this month.

I am currently paying back £75 per month to each card. It’s an aggressive overpayment to the Tesco card and £12 above the minimum on the MBNA card.

The minimum payment would be 1% of the total balance of the Barclays card. With the 3.15% transfer fee that would be about £60 a month.

This would free up £90 a month for other things such as savings, day to day expenses etc.

I currently bring home £1,680 a month. Looking to get a raise in the near future.

Is this a crazy thing to do? The debt relates to a really intense two year period of bad mental health. I have moved on from that place and don’t need a lecture on how stupid it was to let it build up to that point.

YABU - leave it where it is

YANBU - move it, save the extra and pay it off before the end of the interest free period

Why not move it and carry on paying off the same amount you are now?

If it saves you money and you can definitely pay it off over the interest free period, it’s obviously worth doing, but be absolutely sure you will get that length of time if it’s a new card

To be honest the extra £90 is really needed - if it was interest bearing I’d definitely overpay but as this will all reduce down the actual value of the debt, I feel somewhat comfortable with reducing the payment down. If/when I get the promotion I’ll obviously review in due course

I’ve already applied and got it confirmed. I was shellshocked when it popped up in my ClearScore app today!

Yes, that's what I did when I had built up a small amount of credit card debt. I cleared it within a year.

Leave them as they are, just move the one that runs out in October. Every time you shift it, you will have to pay a transfer fee, so leave it on 0% as long as you possibly can. It’s possible that MBNA will give you another offer by then, too.

Oh just read the new posts. If you think the £90 will make a big deal difference, move the balances and see it as buying yourself extra time!

It is a 3.15% transfer fee but then I do anticipate that this will be the last time I move them - I have really reformed my spending, and aside from a couple of pricier months, I don’t foresee needing the money past about September, when I can really start to pay them down aggressively

The only problem I had was when applying I told them the credit card limit I wanted and they said I was successful with the application. But when I received the card the credit limit was no where near what I wanted. So I wouldn't have even got the card if they had told me this when I applied

I applied for £6,000 - they’ve given me a limit of £11,000! Which baffles me. I won’t be using it to spend on, so it’ll be left well alone.

That's good then.

I think it’s good to have quite a lot of unused credit, no? It is meant to be good for your score

I would personally keep them as is until September and then transfer so the 36 month period starts then. Moving them now means you'd lose 3 months 0% interest free (getting 36 months from now instead of 39 months from now).

You'd only be saving £270 in the interim by switching (3 months of £90)... but you could stop overpaying for those 3 months if you really needed to?

Also, the £60 min repayment you mentioned for the Barclays card realistically won't cut it. That's only £2.1k over the 36 month period so to avoid interest you'll really need to overpay anyway so keeping to the £150 payment a month is better if possible (even that is slightly short after the 36 months but close).

As I’ve said - once I’m through the summer I will hopefully have had the promotion and be able to start really aggressively overpaying.

I’m pretty convinced on it now. If I put away the extra £90 in an account for the next 36 months, at 3.6% a year, I would have just about enough saved at the end to pay it off. But the ability to use it if I need. I foresee things becoming easier at the end of the summer.

Work out the amount you’d pay towards the cards currently on a 0% until this ends and whatever balance is left then transfer over. If you leave it, Barclaycard might take the 0% for 36months away. On the offer there is usually an expiry date for the offer.

Why would you think this was a bad thing to do? It’s really normal to move debt around to get the best 0% offer, I and many others do it all the time.

I have to admit I’ve never really understood what to do with it before. There’s a lot of shame attached to it

There’s nothing shameful about having well managed debt. It’s how most of the world ticks over.