How to Compare No Fee Balance Transfer Credit Cards: part 2

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Part 2 of 'How to Compare No Fee Balance Transfer credit cards' aims to advise you on what to look for, what to watch out for and important stuff to remember when comparing and choosing a no fee balance transfer credit card.

Unfortunately, the days of fee-free 0% balance transfers have all but come to an end, and while you still may be able to track down one or two - the 0% periods will barely reach the 6 month mark.

If you have decided that you would rather avoid paying a transfer fee than paying an initial cost for a 0% balance transfer deal - or - that you want a promotional rate until your balance is repaid in full then read on to find out how to compare no fee balance transfer credit cards - and ultimately get the best credit card for your individual needs.

What to look for...

- The best balance transfer deal
Low rate for life balance transfers offer a low interest rate, one much lower than any standard rate you may be already paying - usually around just 5% - 6% p.a. until you have repaid the balance in full - removing any worries of ending promotional periods and giving you plenty of time to repay your balance slowly.

The actual interest rates available vary - so remember to look at what the promotional balance transfer interest rate is. This is usually quoted per annum - which can be tricky to understand, as it means you'll be charged that percentage of your balance for owing the money for a year. What you'll actually pay in interest charges each month will be much less (approx. the per annum rate divided by 12).

- Do you also want to use the card for purchases?
If you also want to use your new no fee balance transfer credit card for spending, perhaps also benefiting from promotional introductory rates, it's important to choose the right card.

A no fee balance transfer credit card will be suitable for purchases if it also offers the same promotional rate and period - or a lower promotional rate for purchases as it does for balance transfers.

You also need to check out the allocation of payments clause in the terms & conditions (can be found in the 'summary box' too) to be doubly sure it's safe for spending as well. The allocation of payments clause states the order in which balances will be repaid - so you need to make sure you'll be able to repay any purchases before the promotional purchase period ends - or they could become trapped behind your then-cheaper balance transfer when the standard purchase interest rate kicks in.

What to watch out for...

- How will payments made to the card be applied?
The majority of credit cards that offer promotional rates will usually allocate the payments you make to your card to these promotional or lower rates before any standard or higher rate balances.

This means that payments will go towards repaying your balance transfer until it is repaid in full, so any purchases or cash transactions you make may be left unpaid, accruing interest charges, until you have first repaid your balance transfer.

- Is there an annual fee?
No fee balance transfer credit cards do not charge you a handling fee for transferring balances to the card, however this doesn't mean that the card will not charge any other fees.

Some no fee balance transfer credit cards may charge an annual fee, which is a fee payable each year for holding the account.

Annual fees are usually limited to credit cards offering flyer mile reward schemes, however, it's important to find out when choosing a no fee balance transfer credit card as this will be an added expense.

Don't forget!

- Your monthly repayments...
Promotional balance transfer deals require you to make at least the minimum payment each month to continue benefiting from the low interest rates.

The minimum payment will be around 3% of your outstanding balance, however it is always advised to repay more than this so you can begin to clear your the money you owe on credit cards.

- Check the balance transfer conditions...
Most no fee balance transfer credit cards will require you to transfer your balance within a set time frame to qualify for the promotional offer.

This 'window' period can be as short as 30 days, so it's a good idea to transfer your balance during card application or as soon as you can once your account has been opened.

- You cannot transfer a balance between credit cards issued by the same bank or building society
When comparing no fee balance transfer credit cards it's important to choose a card that is issued by a different bank or building society group than your current card - or cards that you want to transfer balances from.

This is because banks or building societies will not offer you a promotional rate on outstanding balances you already owe to them.

Our compare no fee balance transfer credit cards page lists the credit cards available with the bank or building society group who issues the card, so you can see at a glance which cards you will be able to transfer your existing credit card balance too.

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Compare no fee balance transfer credit cards