|
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.
Want your credit card questions answered? Email us at for a speedy response.*
*Please read this before contacting us:
If you ask us a question we may publish your question and our response on our website, we won’t include your full name or email address but if you do not want your question published just let us know. We will do our best to reply to all questions as quickly as possible, however we can't guarantee a response.
Do not send us any personally identifiable information such as bank details, we will never ask for them.
Please note any answer or reply we send you or publish on our website is based on general factual research and does not in any way constitute financial, investment, tax or other advice. Any response we give is intended to provide general information only and does not attempt to give advice that relates to your specific circumstances. You are advised to discuss any specific queries or concerns with your bank, an advisory body or a financial advisor. You are also advised to conduct your own research before acting or not-acting on any issues raised.
If you are worried about debt or are experiencing any financial difficulties please contact the CCCS or National Debtline who will be able to offer free and impartial advice. You can also access free rights advice through Adviceguide from Citizens Advice Bureau. We are not in any way connected to the CCCS, National Debtline or Citizens Advice Bureau.
 Credit Card Comparison
Credit Card Guide
Credit Card Questions & Answers
|
