Virgin steals back 'best buy balance transfer' award

By Lyndsey Burton Site Editor 8 October 2008

Best Buy 0% Balance Transfers

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AFTER 3 months out of the running, Virgin has come back as the UK's best buy balance transfer credit card by upping their offer to 16 months.

Virgin previously held the best buy balance transfer title in 2007 and the beginning half of 2008 for their 15-month long 0% period.

However, Capital One rivaled Virgin for the 'best buy balance transfer' when they launched the Capital One Balance Transfer and Purchase credit card in July of this year.

The Capital One Balance Transfer and Purchase credit card became the UK's first credit card to offer 0% on balance transfers for 16 months.

Virgin offer 0% for 16 months

As of today, Virgin credit card has finally upped its offer to counter-attack Capital One and reclaim their once cherished 'best buy balance transfer' title.

The Virgin credit card now offers 0% on balance transfers for 16 months, with a 2.98% handling fee and a 16.6% APR typical.

What also stands the Virgin credit card out from the crowd in the balance transfer stakes is the ability to get 0% for 16 months when you transfer money to a current account as well as transfers to pay off existing credit card balances.

Money transfers to current accounts allow for further possibilities of repaying overdrafts, small loans and non-credit card debts, as well as stoozing.

Good balance transfers

As with any promotional balance transfer there are many terms and conditions to be aware of to make sure you keep your promotional rate and do not incur any unnecessary interest charges or fees.

To make sure you retain the 0% interest rate on a balance transfer you must always pay back at least the minimum amount required each month. For the Virgin credit card the minimum amount required is the total interest, any payment protection premium and any default charges plus £5.

It is, however, never a good idea to only pay back the minimum amount every month. You should aim to pay back as much as you can comfortably afford to and aim to clear your balance by the end of the 0% period.

It's also worth noting here that the standard interest rate charged on balance transfers - once the promotional 0% period ends - is now 18.6% per annum - 2% higher than the standard rate for purchases or typical APR.

The Virgin credit card has also amended it's balance transfer 'window-period' with this update and now requires all balance transfers (and promotional money transfers) to be made within 60 days of account opening to qualify for the 0% deal.

Payment allocations

Shorter 0% purchase periods while attractive, are usually a big no-no when it comes to using a credit card for its 0% balance transfer offer.

Generally speaking, payments made to the account will be applied to the longest length 0% balance first - towards the balance transfer amount - effectively leaving any new purchases to attract interest once the shorter 0% purchase period has expired.

However, the Virgin credit card terms and conditions now state that if you have two balances at the same promotional rate - e.g. 0% - payments made to your account will be allocated towards repaying the balance with the promotional rate which ends first - e.g. the purchase balance in this case.

So if you do use the Virgin credit card for a 0% balance transfer, and also spend on the credit card for its 0% purchase offer for 6 months - your payments will repay your purchase balance first, so it is possible to clear new purchases at 0% before they start attracting interest whilst also transferring a balance.

You will have to clear any new purchases before the 6 month period comes to end, as once purchases start attracting interest they are re-allocated behind balance transfers when you make payments to your account.

Cash withdrawals on the other hand are simply a no-go area if you using either 0% promotion - as any cash transaction will become trapped behind cheaper rate balances and attract interest until you've first repaid all other balances.

Balance transfer choices

Whilst its always advisable to compare 0% balance transfer credit cards before you apply for a credit card to make sure you have the best deal, the Virgin credit card is the best 0% balance transfer credit card available in the UK today.

With the longest 0% period for balance transfers, a handling fee a smidgeon under its major competitors and the ability to transfer money straight into a current account - the Virgin credit cards wins back its best buy balance transfer title hands down!

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