All about Best Balance Transfer Credit Cards

We’ve spoken about the horrendous rates people are paying for their store cards and credits cards before. We’ve been having a look around at the best balance transfer credit cards currently on the market (we’ll keep this list updated as and when). Before we dig too deep, we’ll talk about balance transfer.

What is Balance Transfer?

Basically, it’s where one credit card company pays off your debt on other credit cards or store cards - this then leaves you owing money to the new company but can save you a lot of money. Here’s an example; Bob owes £2000 on a card from ‘Hand over Fist Credit Co.’ at a APR of 18%. Bob takes receives a new credit card from ‘We’re Here To Help Credit Co.’ and then transfers his £2000 debt on this new card. The bonus here is that the new card gives him 0% interest for 18 months. Quids in!

0% Credit Cards…

For most people, that’s exactly what they’re looking for. 0% means exactly that - it’s like having a short term loan where you only pay back the cash without interest. Generally, you’d start looking around for sites and companies that give credit card rate comparison statistics or the best best balance transfer offers. It’s really that simple. The only downside that we’ve found is that most top balance transfer deals are for new cardholders only and, generally, require you to shift your debt within short time of opening the card account. Top tip: make sure you check out the minimum monthly repayments - not all 0% deals are born equal!

When it comes to your old credit card, most experts recommend cancelling it. There are a number of reasons for this but the main reason is that certain issuers may reject you if you already have one of its products, or have held one in the past twelve to eighteen months.

So what next? All you need to do is get you new card, transfer the balance then put it away. The key here is not to use your sparkley new credit card for anything but balance transfer. Why? Because most vendors will hike your interest rate up as soon as you use it for any transaction other than a transfer which is not what you want.

Now we get to the really meaty part - what sort of deal do you need? We’ve decided to describe two: 1) life-of-balance transfer deal - with this type of deal you’re looking at a fixed rate for the duration of the loan i.e £4000 at 5.5% for the time you have an outstanding balance on the card. With this type of offer most vendors tend not to charge you for a balance tranfer. 2) 0% credit card balance transfers - 0% interest but for shorter periods, i.e. 12 months and you typically pay a fee for moving your debt over to the new card.

Below, we’ve listed the best offers currently available on both types of card.

Cheapest long term deals

Barclaycard Simplicity - 6.8% plus there’s no fee provided you shift your debt within 60 days of opening the card. (Balances of over £5,000 transferred is charged at 6.9%). You also have to have an income of £10,000, be 21 or over, and not have another
Barclaycard.

Leeds BS - 5.9% plus 2% fee. If you intend to take over 5 years to repay your debt this is the best card available. There is also a one time fee of 2%. This card also offers cashback and a 0% rate for new purchases - DO NOT use these features as you’ll end up jumping to the standard rate of 17.9% APR. No income restrictions but you must transfer balance in 60 days of getting the card.

Best 0% credit card balance transfers

If you can pay your debts off in under a year, or you’re happy to jump ship and apply for a new card near the end of the 0% deal then you need to be looking at these cards:

Virgin credit card - 0% for 16 months with a one time 2.98% fee. Virgin have giving the best deals for a long time now so it’s well worth a look.

Abbey - 0% for 15 months but with a marginally higher fee of 3%. Best bet if you already have an MBNA card. No minimum income, Standard rate: 15.9% APR (if you come out of the offer period or use your card for a purchase).

Egg - Transfer debt to Egg* and you get 0% until 1 June 2010 with a one-off fee of 3%, followed by 16.9%
APR. The sooner you apply, the longer you get on 0% rate.

If you’re happy moving cards every time a deal ends or you can clear your debt fast then the 0% interest credit cards are definitely the way forward.

Anyway, we hope this article on the best balance transfer credit card deals has been helpful. One thing we can’t repeat often enough - if you have a 0% deal, transfer your debt then put the card away and DO NOT be tempted to use it otherwise you’ll find that most companies will automatically up your interest rate.

If you’re looking for easier ways to afford this buying outright you should look at some of the credit card plans from
Virgin or Asda Finance.