Credit Card Questions & Answers

Related FAQ's Q. How long is the longest 0% balance transfer deal available? A. 0% balance transfer credit cards may no longer be the new craze of the financial world – but their popularity has yet to abate and neither has the competition between the credit card companies. Q. Why do I have to pay a transfer fee? Can I avoid paying it? A. Balance transfer handling fees - or transfer fees for short - were introduced by credit card companies to recoup lost profits from 0% rate offers. It’s now become a real rarity to find any 0% offer without a transfer fee – and when you do, the 0% period tends to be no longer than 6-months max. Q. What is the limit of how much I can transfer to a 0% rate? A. How much you can transfer onto a 0% balance transfer credit card is mostly limited by the credit limit offered when you open the account. Q. How much can I transfer? A. Generally speaking the amount you can transfer onto a 0% balance transfer credit card will be determined by the credit limit granted by the new card issuer.

If you move your current credit card debt onto a 0% balance transfer credit card deal you will still have to pay at least the minimum amount required each month.

The minimum monthly payment on a 0% balance transfer credit card will be approximately the same as your current card, with minimum payment amounts usually ranging from 2% to 3% of the total balance owed.

For a balance of £2,500 a 3% minimum repayment would work out at around £75 – reducing each month as the balance is repaid.

Reducing the balance

One of the main benefits of a 0% balance transfer is that there is no interest added on to the outstanding balance each month, so any payments you do make to the card will go straight towards repaying the debt instead of paying back monthly charges.

0% balance transfer deals are time limited though, so the more you can pay back each month the quicker you’ll reduce the amount you owe and aim to get it paid off before the 0% period ends.

Paying more than the minimum

Whilst you only have to make the minimum repayment on your credit card, it is advisable that you pay as much as possible each month rather than just sticking to the minimum repayment. There are a number of reasons for this.

First of all it is important to remember that the interest free period on a 0% balance transfer card is for a limited period of time, and if you do not clear the balance within the specified interest free period you will be charged the standard rate of interest on any remaining balance, and this could really add up.

By paying as large a sum as possible each month you can increase your chances of clearing the balance within the 0% period and avoid paying any interest.

Secondly, it is best to clear credit card debt as quickly as possible, as otherwise your debts can spiral out of control. If you only make the minimum repayment it could take you a very long time to clear your balance, but by making slightly larger repayments you can clear your balance much more quickly.

Of course, many households are financially strained at present due to higher living costs and mortgage repayments, so you may find that you cannot stretch to making larger repayments.

If this is the case you should make sure that you always pay at least the minimum repayment, otherwise you could find yourself being charged late fees and missed repayment fees, and you could even find that the credit card provider withdraws the 0% facility on your card.

Compare 0% balance transfer credit cards

0% balance transfer credit card questions & answers
Credit card questions & answers

Search FAQ's

Ask a Question

Send in your question and we'll do all we can to help answer it.

Where appropriate user questions will be added to the FAQ's for future use.

Browse FAQ's