Money Insider: The 10-point credit card transfer checklist
Friday 10 January 2014
The post-Christmas credit card bills will hit the doormat in the next couple of weeks. Instead of fretting about how you’re going to pay those bills, switch your balances to a 0 per cent deal to help you clear your debt more quickly and cheaply.
Card companies are eager to lend to creditworthy customers, with Tesco Bank, MBNA and Barclaycard all launching new offers in the last fortnight, for up to 30 months. But before you move your balance to an interest-fee card, you need to be wary of the potential pitfalls, so draw up a 10-point checklist.
1. Check how much you owe – look at your latest statement and don’t forget to include any additional spending since then. If in any doubt, call your card provider to confirm.
2. Use an online calculator to see what you’ll save by switching to a 0 per cent card – such as the UK Cards Association or Money Advice Service
3. Work out how much you can comfortably afford to pay back each month – make sure this is manageable within your monthly budget. Divide your outstanding balance(s) by the amount you can afford monthly – then you know how long a 0 per cent term you need.
4. The longest 0 per cent term may not be the cheapest. As a rule of thumb, the longer the 0 per cent promotional deal, the more expensive the balance transfer fee. So don’t opt for 29 or 30 months if you know you can clear your debt much sooner.
5. You can’t transfer plastic debts between certain credit cards, such as MBNA and Virgin Money. Existing Barclaycard balances cannot be switched to a new Barclaycard, and no transfers are allowed between First Direct, HSBC, M&S and John Lewis credit cards as they are all part of the same group.
6. Check if you are eligible for the card without a footprint having been made on your credit record. MoneySavingExpert offers a function on its website to help you find this out. Also, some card companies allow you to make a “soft search” as part of the initial application, including Fluid, Nationwide and MBNA. It’s better to know this upfront rather than go through a long application process, which is registered on your credit record, only to be declined.
7. Ensure you make your balance transfer(s) within the limited timescale permitted. Some card providers request that balance transfers are made within 60 to 90 days of the date your card account is opened.
8. Don’t give your provider an excuse to cancel the 0 per cent rate; set up a direct debit to make the minimum payment each month (you are free to make extra payments on top of this). Otherwise, if you’re late with a payment or exceed your credit limit, your 0 per cent deal will be terminated immediately and you will be faced with paying a high interest rate and be back to square one.
9. There are three reasons for closing down old card accounts: it removes the temptation to run up balances on the card(s) in the future; cards with a zero balance will still be taken into account on your credit record as the credit limit on each card will be seen as borrowing available for you to use; and if you just destroy the card without closing the account, there is a security risk –if you were to move home and forget to advise the card company, a new card would be posted to the old address at the expiry date.
10. Keep tabs on your new card balance and make a diary note for two months before the 0 per cent deal expires. This gives you time to switch again if you know that the balance isn’t going to be repaid fully by the time your promotional rate comes to an end.
Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.uk
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered
- 3 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 4 Now we know whose fault it is if you end up being murdered in Thailand
- 5 35,000 walrus gather ashore on north-west Alaska beach 'for a rest'
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Benefits 'smart cards' plan revealed by Iain Duncan Smith to stop claimants spending welfare money on alcohol
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...
Day In a Page
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors