Beginner's Guide To: Balance transfer cards

Kate Murphy,Moneysupermarket.com
Saturday 18 July 2009 00:00 BST
Comments

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

There are hundreds of credit cards available, but with providers now more choosy, it is important to make sure you apply for the right card and one you're likely to be accepted for.

Over the next few weeks, we'll be looking at the different types of cards available to help you identify which is most suitable.

This week, it's balance transfer cards.

What is a balance transfer?

Credit cards aren't only for spending on. If you have outstanding debts on credit or store cards on which you are being charged a high rate of interest, you may be able to cut the amount you are paying by transferring the balance onto a new credit card.

Why bother?

A number of cards offer interest-free periods on balance transfers enabling you to save a significant amount of interest. The longest 0 per cent offer currently available is 16 months with Virgin.

You will be charged a balance transfer fee – typically 2.5 to 3 per cent.

You should aim to clear your balance during the interest-free period because you will accrue interest at the standard rate once the 0 per cent deal ends.

What to watch out for

Be careful about spending. Often, credit cards offering 0 per cent on balance transfers also give an interest-free period on purchases.

If the duration of both is equal, as is the case with the Halifax All In One card, which offers a nine-month interest-free period on balance transfers and purchases, it is fine to use the card for both purposes.

However, many products offer a longer interest-free period on balance transfers than on purchases. For example, while the Virgin card has a 16-month interest-free period on balance transfers, the 0 per cent offer on purchases lasts just three months – you'll be charged the standard rate once that ends. With cards such as this it is important not to use them for both spending and transferring a balance.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in