Balance Transfers Introduction

Credit card balance transfer involves using a credit card to pay off the amount outstanding on one or more credit/store cards. The total debt then moves to one card.

The main benefit of balance transfer is a money-saving one. In the competitive credit card market an increasing number of companies are offering a 0% interest rate for a fixed period on balance transfers made by new customers. This allows new cardholders to make considerable savings in interest repayments. Interest free periods vary and certain credit card issuers extend the 0% interest rate offer to cover new purchases, it is worth taking great care to compare balance transfer offers well before deciding which one to choose.

Some companies offer lower than average interest rates on transferred balances for the life of the balance transfer. This may be good news for card users who are not planning to pay back credit card debt in the short term.

Transferring credit card balances is usually a simple process. Once a card application is approved it usually involves a phone call to the new card issuer to transfer the balance(s) from the other card(s). Many credit card companies also offer an on-line service, making it even easier to transfer balances via the Internet.

There is usually a window of time after a new card is approved during which balance transfers attracting the promotional interest rate must be made.

A word of caution regarding balance transfers. Minimum monthly payments still need to be made. Fall behind with minimum payments and fines can be made and interest free offers withdrawn. The same can happen if credit limits are exceeded.

In a market full of balance transfer deals, offers vary greatly. It is important to double-check the details carefully before signing on the dotted line. For example:

  • Are there any additional fees to be paid when balances are transferred?

  • Do I need to make a minimum monthly spend using the new card to qualify for the promotional balance transfer rate?

  • How soon after my credit card is approved do I need to make the balance transfer?

  • What interest rate is charged on new purchases made using the card? In particular, 'Balance transfer for life' cards often put payments towards clearing the low interest balance transfer and not the recent purchases that attract higher interest

  • Do I get charged interest on new purchases from the time the purchase is made?

  • What does the interest rate revert to after the promotional period has finished

    • Before taking up a balance transfer offer, also take time to consider the amount you need to move and how much you intend to pay off and purchase each month. That way you can be sure that you choose the right card for you.


    The latest balance transfer offers in the UK at the moment can be seen at www.1st-uk-credit-cards.co.uk/summary_by_Transfer_Rate.html


    Phil Edwards is a Business analyst in the city of London, freelance writer for several finance magazines and websites and co-owner of 1st UK Credit Cards and 1st UK Loans

    More Resources

    Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

    More Credit Information:

    Related Articles

    5 Steps You Can Take to Get Paid!
    There are always some companies that have past due invoices and can't seem to get them paid. They might be quietly waiting to get paid not wanting to contact the client for fear of appearing "desperate".
    Identity Theft - Dont Think You Are Immune
    As identity theft becomes more prevalent, the need to regularly check your credit report is veryeasy to see and understand. Two big headlines in the news recently point to how closely tied yourcredit report and identity theft are.
    The FICO Score Misconceptions
    There are many misconceptions about credit scores out there. There are borrowers who believe that they don't have a credit score.
    How To Use Your Credit Cards Wisely
    Are you one of the thousands pulling your hair out trying to figure out how you're going to pay your credit card bills? Using your credit cards wisely and sensibly will help you avoid financial problems and establish a strong credit rating, so here's some information to help you get your credit card problems under control.Credit cards are convenient for buying things now and paying later.
    Four Tips How Homeowners Can Rebuild Their Life After a Foreclosure
    Let's face it, if you are facing the possibilities of losing your home due to a foreclosure and you think that you may never be able to purchase another home anytime soon. Keep reading.
    Credit Enhancements: Seven Tips For Enhancing Business Credit Transactions
    What are the avenues available to businesses with weak credit profiles or to companies pursuing credit transactions that are perceived as too risky by credit providers? Many companies apply for credit at banks, finance companies or equipment leasing firms and are routinely rejected due to the high degree of perceived credit risks. When approaching a credit provider, it is helpful to understand what can be done to reduce the risk of a credit transaction in the eyes of the provider.
    Ten Steps To Building A Good Credit History
    Are you thinking of buying a house? Do you want to buy a new car to replace that old wreck? Trying to get insurance on you home, auto, or life? In each of these situations, what's on your credit report will determine if you can get a loan or insurance and what rates you'll have to pay.If you're trying to build or repair your credit history, you have a daunting but not impossible task in front of you.
    What is Credit Card and Debit Card Blocking?
    Have you ever been told you were over your credit card limit, or had your debit card declined, even though you knew you had available credit or money in your bank account? If this happened shortly after you stayed in a hotel or rented a car, the problem could have been card "blocking."What is Blocking?When you use a credit or debit card to check into a hotel or rent a car, the clerk usually contacts the company that issued your card to give an estimated total.
    Useful Tips When Choosing Credit Cards
    Chances are you have received your share of "pre-approved" credit card offers in the mail, some with low introductory rates and other perks. Many of these solicitations urge you to accept "before the offer expires.
    How Businesss Mess Up Their Credit Policies
    In "Become the Squeaky Wheel" a book recently published, Michelle Dunn demonstrates the major areas a business should focus on to ensure a satisfactory customer experience.One mistake business owners make is not having a credit policy in place when they open their business.
    What You Didnt Know About Your Credit Card Numbers
    Have you ever really looked at your credit card and tried to figure out what that huge string of numbers really means? Do these card issuers have so many customers that your account number has to be 16 digits long?You may be surprised to know that all those numbers you see actually do stand for something, and it's not just who you are. Let's take a look.
    Understanding Your Rights Under The Equal Credit Opportunity Act
    It wasn't all that long ago that lenders blatantly discriminated when it came to approving credit for women and minority groups. Women were actually asked personal and demeaning questions like, how many children do you plan to have in the future or are you on birth control?Despite the fact that they were entering the workforce in record numbers, single women were often required to get a cosigner or denied credit altogether.
    Credit Cards: Pros and Cons
    Sure, there are a lot of problems with credit cards, but there are a lot of good things attached to them as well. For instance, if you have a small business, fleet credit cards can keep your books in order when you issue them to drivers of company vehicles for gas and automobile repairs.
    Credit Card Entrapment - The Secrets are Out
    Have you ever wondered why your credit card bill is so high and you can't seem to pay off the balance? Well you are not alone in this. You should be aware of a couple of trick that they use and you probably don't even pay attention to it, but you definitely pay for it and BIG!The next time you open up your credit card statement, take a real close look to all the "junk" inside particularly the very hard to read insert Call "changes to you credit card agreement".
    3 Ways to Improve Your Credit Score by 50 Points In Less Than 30 Days
    In Less Than 30 Days. "What can you do to increase that set of three numbers on your credit report that can be so important with your financing?" I came across this question as I was surfing discussion groups the other day.
    Building A Credit Report Lenders Will Love You For
    Will lenders really love you for having a good credit report score? Love is not the right word of course; lenders are after your money, and never forget that. But the lender's representative will love dealing with your credit application if your credit report is good.
    How to Deal with Hire Purchase Debt
    WHAT IS HIRE PURCHASE/CONDITIONAL SALE?Although people often talk about "buying on HP", Hire Purchase Agreements are quite unusual these days. Cars are the most usual goods sold under Hire Purchase or Conditional Sale Agreements.
    Like It Or Not, You Have A Score To Settle! Part 1
    Just when most people finish with school and can stop worrying about test scores, there's a new kind of scoring that enters the picture. It's called credit scoring.
    Have You Checked Your Permanent Record Lately?
    As a young student I feared getting bad grades because I didn't want any bad marks on my "permanent record." Get an "F" in fifth-grade science and it goes in your record.
    Useful Tips On Avoiding Credit and Charge Card Fraud
    Credit and charge card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of fraud, it can occur in other ways.