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Martin Lewis: 'If you can't afford to clear your credit card each month, you can't afford NOT to read John's email... "I'm saving £2,280/yr interest, which I'm using to clear the debt"'

After an entertaining but exhausting few days presenting Good Morning Britain, I was woken perked up after reading an email to MSE.

This article was originally written by MoneySavingExpert founder Martin Lewis for our weekly email on Wednesday 30 June. It's been updated by the MSE team with the latest product info on Tuesday 6 July.

It inspired me to issue a clarion call to everyone paying interest on existing credit card debt... CARDE DIEM (ut hmm, seize a top card today) - as six lenders are vying to top the balance transfer charts, increasing your acceptance chances.

And it's timely too, as the mood music indicates the next move on interest rates is more likely to be up than down. Here's the email...

From: John
Sent: 16 June 2021 20:50
Subject: Balance Transfer

Hi Martin and Team,

A year ago, when my employer refused to pay me, refused to furlough me and refused to make me redundant, it left me without any income. With a mortgage to pay and an 8 year old, my credit card debt rapidly increased.

Over the past year I have used your tool three times to gradually get all the credit card debt on to 0% cards and it is now saving me just over £190 per month in interest payments, which I am using to pay off the debt as quickly as possible.

Many thanks. John

A simple message – when it comes to debt, cheaper is better, and perseverance counts. Below, four important need-to-knows.

Four important balance transfer need-to-knows

Eligibility chances don't look great? It can still be worth applying

Remember percentages are a clinical measure. A 50% chance means half those in your situation will be accepted. And while 95% seems almost certain, you can still be the 1 in 20 who doesn't get it.

My worry is many are wrongly put off by low odds. I often tell a tale of something that happened a few years ago, which may help...  

I sat with a MoneySaver who had large, costly card debt and a poor credit history. Her eligibility showed zero chance of all balance transfers, except a 20% chance with Halifax. She looked despondent and asked me: "Is there any point?"

I explained that as it was the only credit she needed - there was no mortgage application or similar due - it didn't overly matter that a rejection would mark her file. The reason to protect your credit history is so you can get maximum use from it when needed. 

This was her most pressing financial need, so a 20% chance was better than nowt. The worst that could happen was a rejection. She applied and got a 26mth 0% card with a £1,500 limit.

For more on this, and what you can do to improve things, see my related blog: Why you shouldn't worry too much about your credit score - it's not actually a real thing.

In serious debt? Seek free help instead

The solutions I've put above are for those who can manage repayments, keep their head above the water, and who aren't in a panic over debt. I have three questions you should ask yourself... 

  • Do you struggle to make the minimum monthly payments?
  • Is your total debt (excl mortgage & student loan) over a year's salary?
  • Do you have sleepless nights or depression/anxiety over debt?

If you've said yes to any of these, forget the solutions above and instead get free, one-to-one debt-counselling help from Citizens Advice, StepChange or National Debtline. And if you need emotional support, try CAP.

They're there to help, not judge. The most common thing we hear after is: "I finally got a good night's sleep." Read inspiring stories in our Debt-Free Wannabe forum and see our Mental Health & Debt and Debt Crisis Help guides.

PS: If you have experience of mental health and debt problems (or a close family member does), my charity, the Money & Mental Health Policy Institute, is always looking for new members of its mental health and money research panel to help us formulate new policies to help.

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