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credit card balance transfer advice needed

  • 15-10-2011 8:10pm
    #1
    Registered Users, Registered Users 2 Posts: 12


    Hope someone out there can give me advice.

    I've fallen into the credit card trap and can't seem to get anywhere with paying it off.

    My current balance is €7500 and I always pay as much above the minimum amount due but when next months bill comes in the interest swallows a good bit of what I've paid off.

    I applied for a Tesco credit card with 0% interest for 10 months but the limit on their card is €2500. They can't increase it but they say they will transfer 95% of their limit from my MBNA credit card which will be around €2375.

    The Tesco card came today so I don't know whether to activate it and transfer as much as I can or is this just digging a bigger hole for myself.

    (P.S. I can't get a loan to clear the credit card so this isn't an option unfortunately)

    Hope a few of you out there can help. Thanks in advance


Comments

  • Registered Users, Registered Users 2 Posts: 43 depot


    Im kind of in the same boat as yourself.....Its a difficult position because the interest is so high. I think that you should transfer some it to the Tesco card and try hard to reduce it during the 10 months. Remenber though you will be charged another 30 euro goverment stamp duty on this card too. Try ringing MBNA and see if they will review you current interest rate. Best of luck with it all


  • Registered Users, Registered Users 2 Posts: 12 groggs


    thanks for the reply

    rang MBNA and they said they can cancel the card and sort out a payment plan and when this has been repaid I will start a 6 year bad credit term or whatever and wont be able to get any credit.


  • Registered Users, Registered Users 2 Posts: 43 depot


    Did you ask about your interest rate and if they would reduce it, even a little. Its such a difficult position to be. The 6 years on a black credit list would be very hard


  • Registered Users, Registered Users 2 Posts: 12 groggs


    hi depot. I asked and basically was told they will cancel and organise the payment plan etc. there didn't seem to be any leeway with them


  • Registered Users, Registered Users 2 Posts: 546 ✭✭✭fleet


    7000(balance) * 0.20(interest) / 12(months) = €117 interest per month.

    You don't mention the interest rate, I'm assuming 20%.

    If you could pay:
    150 per month it would take 91 months to clear
    200 per month it would take 53 months to clear
    250 per month it would take 38 months to clear
    300 per month it would take 30 months to clear

    So it's clear the interest IS having an impact, but it depends on how much you can afford to pay off each month. Double your payment, the repayment period goes down 70%.

    My advise?

    Get as low an interest rate as possible, so if Tesco will let you balance transfer at 0% then do this.
    Pay off a small amount each month and then save as MUCH AS POSSIBLE in the Credit Union, try real hard to maximise this saving.
    In 9 months apply for a Credit Union loan based on savings.
    Use this to pay off the card and then start paying back the credit union at whatever is a comfortable rate.

    Even if the Credit Union refuse you'll still be winning as you'll have cut the balance down a fair bit.

    CUT THE CARD UP MEANTIME (and remove it from Paypal, Amazon etc)

    Fleet


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  • Registered Users, Registered Users 2 Posts: 12 groggs


    thanks for the advice fleet


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