Credit card payments

[andy-hughes]

I have tweo credit cards - one has a £1,000 cash loan against it, the other is clear.

Given that financing from another source is not an option - hence the cash borrowing - is it better to split the debt between the two, and have £500 on each? i figure this will reduce the ongoing interest accumalting while I may the debts off, but wanted some advice before I make the split.

[Postdog]

Personally I think the only difference will be minor differences in interest rates, and as most charge a higher rate for cash AND treat this as the main debt, I can't see that you will really benefit in the end. I could be wrong, but when allis said and done, it is paying back that reduces interest, not spreading the debt.

[ubasses]

If the interest rates are the same no £1000 at say 18.9% and 2 x£500 at same rate = same interest over 12 months. If you have another card with nil balance it would pay to use that for other purchases which you pay off in full every month otherwise, depending on your card, you will be paying interest on those purchases as well as the reducing £1000.

[Hopkirk]

Try to get a credit card which allows a 0% balance transfer.

You will pay a 3% charge, but that is a damn sight cheaper than credit card rates.

http://www.moneysavin...transfer-credit-cards

[bednobs]

i don't understand how it'll be any better than having it on one (unless one interest rate is very much lower than the other, and if that's the case, it all needs to be on that one)

[bednobs]

plus you'll have to pay a fee to transfer the balance. There are some credit cards that pay off the higher interest borrowings forst (nationwide)

[The-HouseHusband]

Hopkirk has shown the way ahead for this one, quite a few companies are offering 12 months interest free on balance transfers. If you find the right company then you may even get upto 18 months interest free on balance transfers and 12 months on purchases.
Just be wary of the interest rate that it will revert to at the end of the interest free period and any penalty clauses for late or missed payments.

[andy-hughes]

Thanks all.

[R1Geezer]

yes surf it away on 0% cards Andy. I can't see how splitting is going to save owt!