How to Compare Life of Balance Transfer Credit Cards
Life of Balance Transfer Best Buys
Life of Balance Transfer FAQ's
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Life of balance transfer credit cards offer a way to move an expensive credit card debt to a cheaper rate, which will usually last until your balance is fully repaid - giving you the time to repay your debt slowly, paying off just what you can comfortably afford to each month.
There is number of life of balance transfer credit cards to choose from, each offering slightly different deals - follow our guide below to help select the best life of balance transfer credit card for you.
These cards are best for...
Anyone who has an outstanding credit card balance that they want to repay over a period greater than 1 year.
Life of balance transfer credit cards offer you the chance to clear up existing credit card balances that you are probably paying a small fortune on in interest charges.
These cards will allow you to move the debt to a much cheaper promotional rate, that will remain low until you have repaid your balance in full.
These cards are not suitable for...
- If you can repay your balance quickly...
Anyone who knows they can repay their credit card balance within 1 year.
A 0% balance transfer credit card, while only lasting for a short period, will not charge you any interest on the transferred balance during the introductory period.
If you know you can repay your credit card balance within a year, or you are happy to remove the balance at the end of the 0% period, a 0% balance transfer credit card could save you more money.
- Spending on the card
In short, it is generally not advisable to spend on a life of balance transfer credit card, whilst you are making use of the promotional balance transfer deal.
This is because credit card companies will usually only allow you to repay cheaper rate balances - until these are cleared - before you can repay any expensive balances.
When it comes to life of balance transfer credit cards your balance transfer will usually be the cheapest balance on your card, so any purchase spending will become trapped behind the lump sum you transferred - accruing interest costs whilst you struggle to repay your balance transfer.
If you do need to pay for purchases by credit, it would be best to use a separate card - so that you are able to repay your purchases as soon as you've made them, keeping you safe from racking up any more credit card debt.
- Cash transactions
Few credit cards are suitable for cash transactions - but they won't be found near any balance transfer offers!
Cash transactions - similarly to purchases, just a fair bit worse - will always become trapped behind your balance transfer - except they will accrue interest charges at a much higher rate than purchases, becoming a very costly transaction to make on a card you have balance transferred to.
Remember, cash transactions cover more than just ATM withdrawals, they also include getting 'cash back' at the supermarket, buying foreign currency or traveller's cheques and gambling transactions.
Knowing what's on offer...
Credit cards are as much a financial product as a mortgage, and you wouldn't take out a mortgage without first finding out exactly what was being offered.
Credit cards are however, much more complicated than mortgages or loans, because they do offer so many different types of usages, deals and offers, and a whole host of different rates and fees.
Before choosing a life of balance transfer credit card it's important to fully understand exactly what is on offer and what isn't on offer - this way you'll know exactly what to look for and what to watch out for, and how best to use these cards to save you money.
- What these cards can really help with...
Life of balance transfer credit cards really can help clear up existing credit card debts - giving you the chance to really start repaying your credit card debt and getting back in control of your finances.
Once you've moved your balance, with such a cheap rate - that will last until you've repaid your balance in full - your payments will actually start to take chunks off your principal balance, instead of mostly going towards the hefty interest costs on your current card.
- Getting hold of the promotional rate
Even though the promotional rate offered on these cards is often for the 'life of the balance', the time frame in which you can secure this promotional rate is often much shorter, and the window of opportunity may even be as short as just 30 days!
To remove the risk of ending up with a pretty useless credit card, you should find out exactly how much time you have to transfer your balance to the new card to qualify for the promotional rate.
You can always play it safe and transfer during card application or as soon as you receive your new plastic through the post - using the 'balance transfer' forms sent out with your card or via telephone or online banking.
- Credit cards are not as multi-tasking as they make out...
Most credit cards will often advertise themselves with a nice balance transfer deal, a few months of 0% on your purchases and some cash back or loyalty points on your spending too.
In reality, credit cards are rarely the multi-tasking tools they make themselves out to be - and multiple use of these cards can often see you in the land of sneaky trap-ins and hefty interest bills.
Generally speaking, life of balance transfer credit cards should be used for one thing only - transferring your balance to.
Be very cautious of spending on these cards because credit card companies will usually only allow you to pay off your cheapest debts first, leaving any standard or higher rate transactions - like purchases and cash withdrawals - to accrue interest while you struggle to repay your promotional balance transfer.
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Compare life of balance transfer credit cards
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