0% Credit balance transfer, what does it mean?

Balance transfers are when a credit card or store card debt or other loan is shifted to be repaid on a new credit card, and then instead your debt is with the new credit card and often this is a special low fixed introductory rate.

Many people have high credit card balances and are looking for a way to get their debts transferred to another card with a better deal and are frequently looking for card offers that have 0% rate on then for a fixed period; in doing this it can often can save you hundreds if not thousands of pounds, so it is important to check the best rates on the market and ensure that you minimize the debt. The best credit transfer rates on offer are for new card holders, and the debt you are transferring will need to be applied to the new card account within a few months. Most of the time you will only be cutting the interest and not paying less in regular monthly payments, but by taking the time to switch the debt can save you money.

Many consumers have long since got wise to these zero percent credit balance offers due to the huge competition in the credit cards marketplace, but many card issuing companies offering 0% credit card promotions then began to notice that people were simply switching the cards balance elsewhere when the promotion finished. This bought about the phrase “credit card surfing” or credit card “tarts”. To counter credit card surfers the credit card industry hit us with transfer fees. With this in mind, if you are going to switch cards it is always wise to check the full terms of the offer as you may be hit later.

So is it really worth bothering about?

Tranferring a credit card balance can offer you a way to potentially reduce the cost of the debt as you will be saving on the interest charged if it is lower than your current card provider. You will also need to remember that you usually have to pay a transfer fee which can vary from one card provider to another, so always bear this in mind when comparing the overall deal. It’s important if you are unable to pay the debt in full before any promotional period ends to look at the interest rate after the offer is finished as sometimes one offer can be much worse than another if you only look at the headline grabbing 0% term. If this applies to you then, by checking the interest rate after the zero percent offer is finished will give you an indication of how much it might cost you in the longer term;. so its not only important to check the length of the interest free promotion but what happens after as once it ends you could be paying somewhere in the region of 10-20% or possibly more in interest. It may be time to repeat the process and switch again if you cannot clear the debt in full.

So to summarize the main purpose when evaluating saving money on 0% balance credit transfers is to select a 0% promotion that is the longest in length and with the lowest rates when the the offer ends. Unfortunately, the criteria for being accepted may be another factor if you have an adverse credit rating and you may have to take into account the available credit limits the provider may give you. This may be another obstacle if your debt is beyond the credit limit they give you. The best offers are usually not available for very long so it’s important if you see a good offer to act quickly before it expires. One of the best sources of free information for credit and good finacial management  is Martin Lewis’s site MoneySavingExpert.Com, here you will find all the latest offers on the market.

If you are struggling with your credit card balance then the Money trust have some excellent resources to help you, as well as the National Debtline who can offer free debt advice. You may also get help from your Local Citizens Advice Bureau. Please navigate around

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