0% on Balance Transfer Credit Cards
About 0% on Balance Transfer Credit Cards How much will I have to pay in transfer charges? How long will I receive the 0% interest on my transferred balance? What happens when the interest free period ends?| About 0% on Balance Transfer Credit Cards | Top |
Now, in the good old days when the credit card companies fought for our business, one of the ways to entice us to use a particular brand of credit card was to promote 0% balance transfers credit card. Lenders offered longer interest free periods on their balance transfers and additional extras such as 0% on new purchases.
0% balance transfers were soon discovered by credit card owners (known in the trade as ‘rate tarts’), who moved their balance at the end of the interest free period from their existing lender to another lender who offered 0% balance on transferred balances, and so on and so on. To counter this, the majority of credit card lenders who offered 0% balance transfers, introduced transfer fees, which range between a set amount to a percentage levied against the transferred balance.
0% balance transfer credit cards can be a major help when dealing with credit card debt. They allow you to transfer your existing credit card debt to another card where, for a set period, you’ll not have to pay any interest, so providing you pay off your outstanding balance within the interest free period, you don’t spend any money on interest fees, which seems like a good deal to me.
| How much will I have to pay for transfer? | Top |
The amount you will have to pay in transfer charges differs from lender to lender, but the average amount is usually between 2.5% – 3%. Some credit card lenders cap their transfer rate; typical amounts are in the region of 50.00 GBP.
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How long will I receive interest on my balance |
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The average period of time for 0% interest on transfer balances will vary between the different card issuers, a lot of them only offer an interest free period of approximately 6 months. However, there are some 0% transfer balance credit cards offering longer periods of between 9 –15 months, so it pays to shop around and find the best deal for you.
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What happens when the free period ends? |
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At the end of the 0% interest free period, your interest rate reverts back to what the credit card lender usually charges, and as the average credit card interest rate in the UK is 17.1% (Credit Action, 2007), still having a large outstanding balance at the end of the 0% transfer period is not a good idea and it may be in your interest (no pun intended) to move your balance to another credit card lender offering 0% balance transfers. Alternatively, you may be better off looking at Lifetime Balance Transfers Credit Cards that usually offer much lower interest rates than the average credit card rate of interest.
