Hi, I recently transferred the balance from 2 credit cards (vanquis/capital one) to a virgin 0% card. Is it a good idea to cancel one of my old cards?
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804MikeGG1 postedYes
The more cards that you have, the more credit you have available and the less likely you are to get another card.
Now that you have a new card, DO NOT USE IT! Anything else that you put on it will be left until last under the negative hierarchy and will cost you interest. Set up a Direct Debit for the minimum amount so that you can't default and lose the 0% deal.
Put any new spend on one of your existing cards and make sure that you pay it all off each month. Set up a Direct Debit for the full balance so you won't miss it.
If you have spare cash then pay a bit more off the new Virgin card so as to get your balance as low as possible by the end of the 0% period.
Please note that Direct Debits can take over a month to be set up. If the monthly statement doesn't say it will be settled by Direct Debit, then it won't. Pay by cheque or transfer until it does.
Mike
Posted on 10 March 2010 |
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83SmudgeButt posted
Well done you for moving your debt to someplace that will profit you more than the banks!
I would suggest you cancel which ever of your cards (my guess would be Vanquis) that has the highest interest rate. And then you could use the other for your monthly purchases (clearing in full each month) assuming that the Virgin card you have doesn't have the 0% on purchases for the exact same length of time as the balance transfer. (some do and some don't)
Also re the direct debit - I've only just got my own Virgin card so I'm not sure how their minimum payments work. On some cards they say they will take the min payment and they take it no matter what. On others they will only take it if you have not made any other payment prior to the date for the min payment. I have been caught out in the past on this. They say they'll take the min £10 on the 15th of the month but if I decided to clear the balance and have paid balance less the min of £10 they were taking they then haven't taken that as I have already paid at least the min. (I hope I'm making sense?!) So now when I want to pay extra I time it for between the date the min payment is expected and the normal statement date.
And I would disagree ever so slightly with Mike - if you have extra available put it into an instant access savings account - better you get a pittance in interest than nothing!
Posted on 11 March 2010 | Love 1 love
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804MikeGG1 posted
SB
The instant saver just isn't worth the bother at the moment, so I didn't include that.
If the average amount over a year is £1,000, for example, you only get £1 in interest and that gets taxed.
It is more satisfying to see that balance fall.
Mike
Posted on 11 March 2010 | Love 0 loves
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0theneonone posted
Cheers for all your help and advise guys :-)
Posted on 11 March 2010 | Love 0 loves
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804MikeGG1 posted
Actually, if you know that you will have a regular amount spare to go towards repayment, over and above the minimum, you could take out a 12-month Fixed-Rate Monthly Saver where the rate would be about 4.5%.
That would be worth doing, but the instant saver is too low for me at 0.10%.
Mike
Posted on 11 March 2010 | Love 0 loves
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