0% Balance Transfer Credit Cards | September 10

Our Best Buy Guides: fact-packed and updated monthly

0% Balance Transfer Best Buy Guide

Part 3: Using a 0% Balance Transfer Credit Card

0% Balance Transfer Credit Card Questions

Got a Credit Card Question?

Send your question to and we'll set our team of credit card experts to it!

Most recent questions:

Part 2: How to Compare 0% Balance Transfer Credit Cards

THE introduction of 0% balance transfer credit cards has revolutionised the credit card industry and there are no shortage of deals out there offering zero interest on old credit card debts.

Competition in the sector is extremely high, which is good for the consumer in the sense that there are a lot of offers out there. However, this huge amount of choice also presents a challenge: how to sift through all the dozens of offers and find the one that's right for you?

We've designed this guide to the most important features of 0% balance transfer credit cards to be used alongside our 0% balance transfer credit cards page. Just read on to find the features that will help you to save the most money and then sort the table by feature to find the credit cards that match your requirements.

0% balance transfers cards are good if...

You have an outstanding credit card debt

0% balance transfer credit cards are ideal for anyone with an outstanding balance on their credit card or cards, and for those who are paying interest on this debt.

Moving your balance to a 0% balance transfer credit card immediately stops interest accruing, giving you a financial breather and an opportunity to reduce your overall liability.

The money you are spending on servicing the debt on your current credit card can instead be put towards directly paying off the sum owed, and you can take big chunks out of it during the 0% interest period.

0% balance transfer deals only last for a certain period of time - usually not much longer than a year - after which time you will begin paying interest again.

At the end of this period you will have two choices, either to move your debt to another 0% balance transfer credit card or to move it instead to a life of balance transfer credit card, where you will get a low rate, often fixed, until the balance has been cleared.

You can pay off the debt within the 0% period

If you have a moderate amount of debt, that you know you could clear with just a little bit of help, then you really should get a 0% balance transfer credit card.

Such a deal will save you money, reducing the amount thrown away on paying interest, and will help get you out of debt much more quickly.

Or...

You’re willing to be a 'Credit Card Tart'.

By moving the balance again before the 0% balance transfer window has ended you can avoid paying interest on your debt, even when you can’t pay it off within the introductory period.

Unfortunately, you also get called a credit card tart but don’t worry, here at Credit Card Comparison Online we don’t judge.

If you have a large amount of debt that you won't be able to clear during the 0% balance window, make sure you keep one eye on the calendar and remember to shift your balance to another 0% balance transfer card, or indeed a life of balance card, before you start paying the standard rate of interest again.

0% balance transfer credit cards are not ideal if...

You have a large balance that will take longer than a year to repay

With the exception of those willing to be credit card tarts (see above) if you have a high level of credit card debt, you might just want to opt for a life of balance transfer credit card straight away.

If you are worried that you won’t pay back your credit card debt within the introductory period or you think that you might not be accepted for another 0% credit card deal in time to tart then you’ll almost certainly save money with a life of balance transfer credit card.

These credit cards offer a low rate - usually 4% to 5% per annum - that will remain fixed or at least low until you have your debt repaid in full.

The benefit of life of balance transfer credit cards is that you don't have to worry about introductory rates ending, and you can take your time clearing your balance without always fishing for the next 0% balance transfer deal.

You want to use a credit card for purchases

There's sometimes a bit of sneaky clause (the allocation of payments clause) inserted into 0% balance transfer credit card deals, which could end up costing you a lot of money if you aren't careful.

Many 0% balance transfer offers also include a 0% on purchases deal too.

However, the 0% on purchases deal is often a much shorter period than the 0% interest on your existing debt. What's more, the credit card company often stipulates that the 0% balance transfer - or "longest 0% period balance" - must be paid off first before any of your payments will be applied towards any standard - or even 0% - purchases.

What this means is that you are trapped - you are paying high levels of interest on purchases (when the shorter 0% purchase period expires) and you can't even pay this debt off because it's effectively 'stuck' behind a mound of cheaper balance transfer debt that must be repaid first.

Sound complicated? That’s how it catches people out. Simply put: it’s best to think of your balance transfer credit as a tool for storing your debt, and absolutely nothing else.

Having said that, there are sometimes exceptions to this rule. When a credit card has a 0% purchase deal that lasts for the exactly the same length of time as the 0% balance transfer deal it won’t have the allocation of payments problem described above because the balances are at the same rate.

However, a less risky and often more rewarding strategy is two credit cards – one for balance transfers and one for purchases.

Notable Exceptions… Balance transfer credit cards that you can use for purchases:

0% Balance Transfer 0% Purchases Typical APR
(variable)

Virgin credit card 12 months
2.98% fee 12 months 18.9% APR

Another Way… use seperate credit cards for a 0% Balance transfer and 0% purchases:

0% Balance Transfer 0% Purchases Typical APR
(variable)

Egg credit card Nov 2011
3% fee Not Used 17.9% APR

Tesco Clubcard credit card Not Used 13 months 16.9% APR

You want to use a credit card for cash withdrawals

In a similar way to the 0% purchase deals above the charges from cash withdrawals (ATM withdrawals, foreign currency purchases etc...) won't be included in the 0% deal and they will become trapped behind the cheaper 0% balances.

You have a bad credit history

It can be difficult to get a 0% balance transfer credit card when you have a bad credit history.

Too many rejected applications can further hurt your credit score so if you know you are going to be rejected it may not be worth trying.

One way to rebuild your credit score is to take out a credit card specifically designed for people with a bad credit history to improve their credit score. Compare bad credit rating credit cards here.

However, the interest rates on these cards are astonishingly high so it won't be worth trying to move your existing card debt onto one. Instead, leave it where it is and focus on repaying it - if you are struggling to meet the repayments get in touch with the lender and tell them, often they will be able to reduce the rate - or freeze it altogether - to enable you to repay the money you owe.

How to compare

From what has been discussed above you should now have a good idea of which credit card features will be most important credit card features to you.

I need the Longest 0% Balance Transfer credit card deal:

	0% Period	Fee	Typical APR (variable)
Barclaycard Platinum	16 months	2.9%	16.9% APR
Natwest Platinum (Now re-open to all applicants)	16 months	2.9%	16.9% APR
RBS Platinum (Now re-open to all applicants)	16 months	2.9%	16.9% APR
Nationwide Gold	15 months	3%	16.9% APR
HSBC (HSBC Current Account Customers Only)	15 months	2.9%	16.9% APR

I need a 0% Balance Transfer credit card that I can also use for purchases:

	0% Balance Transfer	0% Purchases	Typical APR (variable)
Virgin credit card	12 months 2.98% fee	12 months	18.9% APR

I need a 0% Balance Transfer credit card for stoozing (to transfer to a current account):

	0% Period	SBT Fee	Typical APR (variable)
Egg Credit Card	Nov 2011	3%	17.9% APR
Virgin Money Credit Card	14 months	4%	16.6% APR
Post Office Credit Card	12 months	2.98%	16.9% APR

Fundamentally, though, 0% balance transfer credit cards are a great product, if used correctly. If you do have credit card debt which is costing you money in interest fees, particularly, you should get stuck into our list of 0% balance transfer credit card offers to find your best deal.

If you need more information on 0% balance transfer credit cards before you compare try our how to use orguides.

0% balance transfer credit cards

This best buy guide does not cover all of the credit cards available in the market.

This guide is updated monthly, which means if any facts, rates or fees change during the course of a month this guide will not reflect those changes until the next scheduled update.

While we will make every effort to ensure and maintain current and accurate information in this guide, readers are always advised to check rates and fees with the credit card provider before signing up.

Date of last check: 2nd September 2010