How to Compare 0% Balance Transfer Credit Cards: part 2
0% Balance Transfer
Best Buys
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» 0% on balance transfers
until (% fee) |
0% purchases until Why? "The NEW best buy balance transfer credit card - offering up to 16 months at 0%!"
% APR
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» 0% on balance transfers
for 15 months (% fee) |
0% purchases for 3 months Why? "Only recently beaten and having held their title for the last 14-months is the Virgin credit card with 0% for 15 months on balance transfers."
% APR
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» 0% on balance transfers
until (% fee) |
Then, 0% on balance transfers for 5 months in 2010 and 2011 (2.5% fee)
0% purchases until
Why? "Super long 0% balance transfer deal for up to months, with a second-year and third-year helping too!"
% APR
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0% Balance Transfer FAQ's
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0% balance transfer credit cards can be a really great money-saving option for anyone who currently has outstanding credit card debts.
0% balance transfer credit cards allow you to move existing card balances over to a new card where you will benefit from 0% interest rates for an introductory period.
Not only will this allow you to save money in interest charges, but you'll also be able to repay your credit card debt quicker as all your payments will go straight towards knocking chunks off your principle balance.
With 0% balance transfer credit cards currently swamping the market-place with various offers it can be a tough job finding – or even knowing - the best 0% balance transfer credit card offer.
This guide, coupled with our compare 0% balance transfer credit cards table, aims to help you compare and choose the best 0% balance transfer credit card for you.
What to look for...
- The longest 0% balance transfer offer
First and foremost on the checklist when comparing cards should be the length of the 0% balance transfer period.
0% balance transfer credit cards vary quite considerably in the lengths of the offers - from 5 to 16 months.
To get the most out of moving your credit card balance to a new card, try and pick the 0% balance transfer credit card with the longest offer.
At the moment, the longest deals can be found on the Capital One Balance and Transfer credit card (16 months), Virgin credit card (15 months), Barclaycard Platinum credit card (14 months), Egg credit card (13 months), RBS credit card (13 months) and the Natwest credit card (13 months).
- Is it any good for purchases?
Whether a 0% balance transfer credit card is any good for purchases may or may not be high up on your list of priorities.
It may also seem like an odd question to be asking - after all, isn't paying for purchases what credit cards are meant for?
However, there are types of credit cards and types of usage where spending can see you in a rather unexpected and costly scenario.
0% balance transfer credit cards are the main culprits here, and this is down to how credit card companies allocate payments to your account. This 'allocation of payments' clause usually orders balances from lowest to highest and applies your payments in the same order, so higher rate balances can become 'trapped' behind lower rate balances.
For a 0% balance transfer credit card to be suitable for both transferring a balance for a 0% deal and making new purchases the card must also offer a 0% purchase deal that will last for the same length of time as the 0% balance transfer deal.
We've compiled a list of all the credit cards that are great to use for both 0% balance transfers and new spending, so you can compare 0% balance transfer and purchase credit cards here.
Due to the recent move away from equal length 0% deals, and these deals becoming shorter in length - you may find it more advantageous to choose a "sole-use" 0% balance transfer credit card and then get a seperate credit card, either a 0% purchase credit card or a longer-term low interest rate credit card for any new purchases you need to make.
However, if you'd prefer just one piece of plastic (or just one application form!) then the Capital One Platinum offers 0% on both for the next 15 months - this is actually a very good deal and the first 'combined' 0% offer to really rival those individual 0% deals.
- The standard interest rate
While not necessarily the biggest selling point of a 0% balance transfer credit card, the standard interest rate should still be taken into consideration.
The standard interest rate is the rate you'll be charged on purchases (where there is no 0% purchase offer, or when the 0% purchase offer ends) and also on balance transfers when the 0% balance transfer offer ends.
An easy way to find out the standard interest rate is to look at the 'APR'. The APR is an annual representation of the standard interest rate plus any annual fee - if charged. And because most credit cards do not charge an annual fee, the APR will usually be the same as the standard interest rate.
What to watch out for...
- Balance transfer handling fees
With the onslaught of 0%, credit cards have had to recoup some of their lost money in the form of handling fees.
Balance transfer handling fees are charged as an administration fee for moving your balance over to the new card.
Unfortunately, balance transfer handling fees are now almost impossible to avoid - especially if you’re looking at getting one of the longer 0% balance transfer deals.
The amount charged is usually around 2% - 3% of the balance being transferred. However, it's important to weigh up the costs, this fee will more than likely be outweighed by the money saved in interest charges after just 2 to 3 months.
Fortunately, the HSBC credit card is one of the longest offers (13 months) with the cheapest fee (2.5%).
- How payments made to your account will be applied
As mentioned above, the way a credit card handles the payments you make to your account should also be considered.
The allocation of payments will usually list lower rate balances before higher rate balances. So payments made to your account will pay off your 0% balance transfer before purchases or cash withdrawals.
Find out how the 0% balance transfer credit card will apply your payments, if 0% balances are repaid first try and use a separate credit card - or a debit card - for any new purchases and certainly for any cash withdrawals you may need to make.
Don't forget!
- No interest doesn't mean no payments!
No interest charges doesn't mean no payments. When you make use of a 0% balance transfer credit card you must make at least the minimum payment each month. Failing to do so could see your 0% deal taken away.
The minimum monthly payment will usually be only around 3% of your outstanding credit card balance - so it's always advise to repay as much as you can comfortably afford to so you can clear your credit card debt as soon as possible.
- The conditions of the offer
Many 0% balance transfer credit cards will require you to move your current card balance to the new card within a set time period to qualify for the 0% rate. This window period is often much shorter than the 0% period, and is often as short as 30 days.
Check the 0% balance transfer offer and make sure to transfer your balance within good time. The best way to move your existing card balance is during the application for the new card, or as soon as your new card account is opened.
- To get a card with a different bank
Remember when comparing cards to choose a 0% balance transfer credit card that is issued by a different bank or building society to your current credit card.
This is because credit card issuers won't offer you a 0% promotional rate on a balance you already owe them!
When you compare 0% balance transfer credit cards, you'll be able to see each credit card with it's issuing bank or building society, so you can easily see which 0% balance transfer credit cards you'll be able to move your balance to.
- The end of the introductory period
And finally, don't forget when your 0% balance transfer deal ends.
Set a date in your diary for when your 0% balance transfer expires - this will allow you to budget your repayments to clear your debt before the standard interest rate kicks-in - or it will let you know when you need to move your balance to another good deal.
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Compare 0% balance transfer credit cards
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