0% Balance Transfer Credit Cards - A Brief Guide
It wasn't that long ago that you couldn't move for credit card companies offering 0% interest on balance transfers for new customers - now though, everyone's tightening their belts and withdrawing such offers left, right and centre.
That's not to say you can't still get a credit card that'll let you transfer a balance to it without incurring interest for a set period though...
it's just they've become slightly harder to track down.
Given that the big allure of a 0% Balance Transfer Credit Card is the fact that you can shift other forms of unsecured debt to them without having to pay interest for a set period, it's no surprise that such cards prove popular.
However, the important thing to remember is that if you ARE transferring a balance to a card like this, that's all you should use it for! Since it's the credit card companies and not you that decides what your monthly repayments cover, any additional spending you make on the card will be put aside to gather interest at the regular Annual Percentage Rate (APR) while you pay off the lower-interest balance transfer.
This means that once you've paid off the entire transfer, you'll have a nasty surprise waiting for you - so keep balance transfer cards for transfers and nothing else! Of course, if you're clever then you can actually keep a 0% balance transfer rate going for a very long time; all you need to do is be incredibly disciplined and aware of your dates.
You simply take out a 0% APR card and transfer your balances to it, then continue to pay it off as normal - then, when you get to 6 weeks before the rate is due to expire, apply for another 0% APR card with a different credit card provider and transfer the remaining balance to that instead! Using a different company is important, since many credit card companies have stipulations in place to prevent balances being moved from cards that also belong to them.
A quick search on the internet should give you an idea of the various cards available with 0% APR on balance transfers; at time of writing, banks like Barclays, Halifax and Nationwide all offer them, as well as companies like Egg and Virgin.
The thing to remember, however, is that some banks also have special card deals for people who already bank with them (such as Santander) and ALL banks will carry out a credit check before agreeing to issue a card, so it might be difficult to get any kind of credit card - let alone one with a 0% balance transfer rate - if you've got bad credit or other financial problems.
In Summary 0% Balance Transfer Credit Cards...
That's not to say you can't still get a credit card that'll let you transfer a balance to it without incurring interest for a set period though...
it's just they've become slightly harder to track down.
Given that the big allure of a 0% Balance Transfer Credit Card is the fact that you can shift other forms of unsecured debt to them without having to pay interest for a set period, it's no surprise that such cards prove popular.
However, the important thing to remember is that if you ARE transferring a balance to a card like this, that's all you should use it for! Since it's the credit card companies and not you that decides what your monthly repayments cover, any additional spending you make on the card will be put aside to gather interest at the regular Annual Percentage Rate (APR) while you pay off the lower-interest balance transfer.
This means that once you've paid off the entire transfer, you'll have a nasty surprise waiting for you - so keep balance transfer cards for transfers and nothing else! Of course, if you're clever then you can actually keep a 0% balance transfer rate going for a very long time; all you need to do is be incredibly disciplined and aware of your dates.
You simply take out a 0% APR card and transfer your balances to it, then continue to pay it off as normal - then, when you get to 6 weeks before the rate is due to expire, apply for another 0% APR card with a different credit card provider and transfer the remaining balance to that instead! Using a different company is important, since many credit card companies have stipulations in place to prevent balances being moved from cards that also belong to them.
A quick search on the internet should give you an idea of the various cards available with 0% APR on balance transfers; at time of writing, banks like Barclays, Halifax and Nationwide all offer them, as well as companies like Egg and Virgin.
The thing to remember, however, is that some banks also have special card deals for people who already bank with them (such as Santander) and ALL banks will carry out a credit check before agreeing to issue a card, so it might be difficult to get any kind of credit card - let alone one with a 0% balance transfer rate - if you've got bad credit or other financial problems.
In Summary 0% Balance Transfer Credit Cards...
- Used to be in great supply, but have now been scaled back by many big card providers
- Are still being offered by several big-name banks, but carry some catches for approval
- Can be used to keep your credit card balances interest free if you're disciplined
- Should never be used to buy things on, only to keep your balance payments down!
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