Using a 0% Balance Transfer Credit Card
0% Balance Transfer
Best Buys
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» 0% on balance transfers
for 15 months (% fee) |
0% purchases for 3 months Why? "Best-buy topper offering the best 0% balance transfer deal available - 15 whole months!"
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» 0% on balance transfers
until (% fee) |
Then, 0% on balance transfers from Aug 2009 until 1 Feb 2010 (% fee)
0% purchases until Why? "13-month long 0% balance transfer offer plus even more 0% from August 2009 for 6 months until 1st Feb 2010.
Mint now comes with a competitive standard interest rate for keeping the odd-shaped plastic in your wallet well past the 0% expiry dates."
% 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 real lifesaver for anyone who is struggling to repay large credit card debts.
The standard rates of interest on most credit cards can keep outstanding balances high, as payments can be mostly swallowed up by interest charges.
With a 0% balance transfer credit card, during the introductory period all your payments will go straight towards clearing your outstanding debt, allowing you to repay your balance faster - and cheaper too!
This guide aims to help you really get the most out of your 0% balance transfer credit card.
Make the most of your credit card...
- Budget your income and begin clearing your credit card debt
The first step in managing credit card debt is to make use of a good balance transfer credit card deal. The second step is to start repaying your credit card debt!
Now you've got a 0% balance transfer credit card the best way you can make the most of it is to budget your income and really try to clear your credit card debt completely.
0% balance transfer credit cards give you real breathing space away from mounting interest charges and give your repayments a lot more punch - with all of your payment going towards repaying your principle balance.
Budget your income and repay what you can comfortably afford to - that's enough to make a dent, but not too much to leave you dining on beans and toast every night!
- Make use of the entire 0% balance transfer period
The sooner you move your current card balance over to your new 0% balance transfer credit card, the sooner you'll start reaping the rewards of a 0% rate.
Just one month sooner - or later - could mean £35 off your balance or £35 lost in interest charges (based on a rate of 16.9% p.a. for a balance of £2,500).
Many 0% balance transfer credit cards will offer a 'window-period' in which you can move your balance to the new card to qualify for the 0% promotion. These window-periods can be as short as just 30 days, and are a good enough reason on their own to make your transfer as quickly as possible.
The best way to transfer your balance over to your new 0% balance transfer credit card is during card application. Alternatively, you can transfer your balance via the balance transfer forms sent out with your new card, or via online or telephone banking.
- Know when your 0% balance transfer offer ends
Knowing when your 0% balance transfer offer ends can help you to work out how much you need to repay each month to clear your balance by the end of the introductory period.
If you know you won't be able to clear your balance by the end of the 0% period, set a date in your diary when your 0% deal expires and remember to transfer to a new balance transfer deal in good time. You can choose to transfer to another 0% balance transfer credit card or even to a life of balance transfer credit card, which will offer a low rate until your balance has been repaid in full.
Things to watch out for...
- Paying for new purchases on credit
If you need to make new purchases on a credit card, make sure your 0% balance transfer credit card is suitable for making new purchases as well as making use of the 0% balance transfer deal.
If a 0% balance transfer credit card doesn't offer a 0% deal on purchases - or if the 0% purchase deal is shorter in length than the 0% balance transfer deal - new purchases made with the card can become 'trapped' behind your balance transfer debt.
This happens because of the way payments made to your card are allocated - with most credit cards repaying your cheapest rate balances first, namely promotional balance transfers.
Play it safe; either opt for a 0% balance transfer and purchase credit card that offers 0% deals on both types of transaction for the same length of time. Or, use a separate credit card, or even your debit card, for any new purchases you need to make.
Equal length 0% deals have become the rarity, and while you can get up to 12 months combined - it may be worth considering getting a long 0% balance transfer deal (up to 15 months) and then a seperate 0% purchase credit card (up to 12 months) for new purchases.
- Only use a debit card - or a separate credit card - for cash transactions
The same reason you need to be careful with using your 0% balance transfer credit card for purchases, also applies to cash withdrawals.
The only difference is that there is no alternative other than using a separate credit card or your debit card for cash transactions. This is because no 0% deal includes cash withdrawals, and so any cash transaction will always become trapped behind any 0% balance you have on your credit card.
Remember, cash transactions include more than just ATM withdrawals, they also cover getting 'cash back' at the supermarket, buying foreign currency or traveller's cheques and gambling transactions.
If you need to make a cash withdrawal, use a debit card if you can, if you really need to use a credit card get a separate card that's good for cash. See low cash advance rate credit cards here.
Compare 0% balance transfer credit cards
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