Credit card transfer?

[WingsofRain]

I have one credit card which has a large balance (just under £6000). Recently the bank told me that they will be increasing the interest rate on it to 24% which will make a huge difference to the cost and I desperately need to reduce the balance.

I’m on a very low income and I’m currently paying £200 a month to the card which is all my disposable income after bills and food.

I have been reading up and I think that transferring part of the balance to a 0% interest card would help, but I’m worried about having two cards and all the online guides assume you can get a card which will take your whole balance, which I wouldn’t.

The other thing I can’t work out is how much I would be able to pay off in the 0% period given that I’ll still be paying to my current card, albeit much less.

Does anyone have any advice? If I could clear this one debt my life would be hugely improved.

Have you had a look to see what cards you would get approved for first of all Op?

You should be able to transfer all of that amount to 1 card. Have a look at moneysavingexpert as you can check likelihood of your application being successful and it tells you the best cards with the longest balance transfer period. Once you come close to the end of the 0% period you can apply for a new 0% card and transfer the remaining balance so make a note of the date that period ends. Make sure you close your original card though. It’s quite straightforward, don’t be daunted, I do this all the time!

Money savings expert do an eligibility checker before you apply…

NatWest gave me a good one before Christmas, if you aren’t too worried about your credit score for the short term, and one card doesn’t give you enough, apply for 2 to spread them out a little.

Join clearscore and you’ll see your credit report and see good 0% offers you could be eligible for. Moneysavingexpert didn’t give me enough of a balance that I could transfer the whole amount to but the ones I was offered through clearscore let me do that so worth a look.

@Pigeonqueen how odd, I found it was the opposite for me. I suppose they all work on some kind of commission though.

Have you looked into consolidating it into a personal loan? It may cost you a little more but it will give you an end date

I was in a similar position to you and put 3k onto a 0% card, there was a fee so I had to work out what would cost more, keeping paying the interest or the % of the balance transfer fee. If you do this and keep your original card on with some of the balance I would make sure you reduce the credit limit down as far as you can so you aren't tempted to use the excess. I got quite reliant on credit cards and found I had to be really strict with myself and keep shrinking the credit limit every time I paid some off so I couldn't build it up again.

Thank you everyone, I have done a check to see what I could get in the past and the maximum balance I could have was £1700. I find the MSE website quite confusing to navigate but I’ll have another go.

I was subjected to financial abuse (among other things) 30 years ago and this credit card is the last thing that is stopping me feeling free of it, so getting the bill under control would be great.

I wouldn’t be able to afford the repayments on a loan and I do need a credit card for emergencies so just paying the balance down as cheaply and quickly as possible is definitely my preferred option.

I’ve never looked at my credit score, I honestly feel very anxious to do it.

Having transfered as much of the debt as possible to a 0% card, you then need to pay the minimum required each month on that card (since the debt won’t be increasing) while putting all your spare funds into the 24% card. You will basically be ‘parking’ the 0% debt (making sure to pay the minimum so you don’t get penalty charges each month) while prioritising the 24% debt.

https://www.moneyhelper.org.uk/en/everyday-money/credit/credit-card-calculator

lets you calculate the date the 24% card will be paid off.

Once the 24% card is paid off in full you then pay the amount you had been paying on both cards onto the 0% card.

Obviously it would be nice if you could make substantial payments on both but you can’t and the above saves you the most money.

The online name for the above is a ‘debt snowball’. Dave Ramsey is very keen on it (if you ignore the very American religious bias, he has good advice).

A little update - I’m still quite confused!
Yesterday I bit the bullet and checked my credit scores with Clearscore and Experian. Experian gave me 999 out of 999 and Clearscore gave me 911 out of 1000. Both of those seem good, and there isn’t much to see that should affect me getting a replacement card.

I ran the card qualification search on MSE this morning and it’s just showing me cards for people with poor credit records, plus one that looks as if it would do what I want but has no guarantee it would allow me to move my balance if I was approved (or, in fact that I’ll be approved).

As I understand it, if I apply for a card and then I’m turned down or I can’t get a big enough balance, my credit score will be affected, so I don’t know what to do for the best.

Oh, and I can’t link my bank account to Clearscore because it doesn’t recognise the Coop on its list of banks, so perhaps that is affecting it? I’ve been with them for over 20 years.

I know you said you couldn't afford a loan this is an example. You'd get a good rate , your credit score is good. It's less than you pay now.

I think your total income and debt amount is more important when being approved for new credit than your credit score.

Is there a reason why you are worried about your credit score being affected? Are you due to remortgage?

I have 2 0% credit cards. I pay the minimum payment to them each month. Then I pay the rest into an ISA, so I earn interest. Will pay it off in one go at the end of the 0% offer. If I haven't saved enough I intend to pay off one, then apply for another 0% balance transfer to extend it again.

To work out how much you need to put in the savings account, work out the minimum payment amount X length of 0% offer, minus that from total. Then divide that by the 0% offer. If you can't afford that, just pay as much as you can and try And find another offer with another bank when the offer is due to run out.

I just wanted to update this and say a little thank you because so often threads just disappear and you never find out what happened.

Your advice gave me the confidence to apply for a much cheaper card, in the end I found out that the bank my other account is held with offers a low rate card which seemed just right for me.

I was approved for it immediately with a credit limit the same as my current one and I’ve submitted all the forms to transfer my full balance. Once the card arrives I’ll be able to start paying off the debt so much more quickly, which is wonderful.

Thanks again everyone!