0% Balance Transfers?

eddie101

eddie101

eddie101

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Right i sit here at home, and where ever your watching tv and advert will come on for credit cards, and advertise '0% balance transfers' until whenever.....

what the hell does this mean :)
 
move your debt to that card and they won't charge you money.

But in reality they want your money because its a credit card, and they live off your interest.
 
Say you have £3000 on credit card x. Credit card y is offering 0% apr on balance transfers for 12 months. (Normally subject to a small % fee. Mine was 2% of whatever balance i transfered.)

If you transferrd your three grand from card x to card y you would then have 12 months to repay the original amount, plus the two percent, with no interest applied.
 
Blackstar said:
It means you don't have the usual charge to transfer the balance of one card to another.
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Nope, the majority of them do have a transfer fee of anything between 2 and 5%.

When you transfer an existing credit card balance to a 0% balance transfer card, you are charged 0% interest on the amount you transfer until the date at which the offer ends.

It can save you a load of money if you have a lot of debt on cards.
 
I've shifted debts around using 0% interest cards - they've only got better too, with longer 0% periods. As long as you can get the credit, it's money for nothing (and as long as it was purchased at 0% in the first instance). I just try and pay off big chunks every month too.
 
You are right, it is money for nothing and it is one of the few opporunities that we as customers have, of taking money from the banks (and credit card companies that they finance).
 
Virgin (underwritten by MBNA) are offering 15 months 0% APR on balance transfers at the mo. And i think Barclaycard are offering 14 months.
 
Just don't use it if you do, most will have rules on what your repayments go towards.

For example you transfer £1000, interest free - great. You then spend £50 on something, but you repay that £50 within the month so you don't pay interest on it.

Nope.

That £50 repayment goes to pay off the balance transfer first, so you'll be stuck paying interest on the £50 until you've paid off the balance transfer.
 
Did this with Natwest recently, 13 months 0% did £6k straight away , half into savings, half into ISA.

Barclays wouldn't give me a Platinum card as I am under 21 , so didn't take up their offer :p
 
That's why you don't use the card after you transfer a balance to it, and continue using the card you had before :)
 
OoOverclockaoO said:
Did this with Natwest recently, 13 months 0% did £6k straight away , half into savings, half into ISA.

Barclays wouldn't give me a Platinum card as I am under 21 , so didn't take up their offer :p
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Wait till you have repaid the Natwest card in 13 months, by which time you will turn 21, then hit Barclays for all they are worth.

These banks are making far too much money (sometimes using unreasonable rules, for example on cheques which take 3-5 working days to clear - utter nonsense) and this is one of the few times we can make money off of them. DONOT let this opportunity go begging.
 
It can be a very easy way to make a little money, particularly if you don't currently use any of your ISA allowance. However, you have to be careful to ensure that you make the minimum monthly repayments on time, else any money you make is rapidly gobbled up in late payment fees and interest charges.
What may be worse, particularly if you have any plans to seek a mortgage in the short-term, is that late payments will also have a negative impact on your credit rating.

Assuming you meet all the minimum monthly repayments on time, I have yet to identify for certain whether the impact of utilising these 0% balance transfer deals in this way, is positive or negative on your credit rating. I personally, used them to get a £10,000 loan for my new car at "0%" for 2 years or so. (The balance transfer fees actually made it more like a 2% APR at the time - but that was better than even the student loan rates and below inflation - so it would have been stupid not to do it).

I seem to be passing credit checks for mobiles, utilities, house rentals etc ... without problems, since then - so I can only conclude that it hasn't negatively impacted my own credit history. What are other people's experience ?

I am considering doing the something similar again - though I have noted that the balance transfer fees have slowly crept up from the 2% to 2.98% that Virgin want now - every increase makes the deal progressively unattractive.
 
I've found that when I've cleared a balance via a transfer, I've had hefty credit limit increases on the previous card - if you're lucky they might ring you up asking if you would like to take promotional rates (0%, again? Please! :D ) I've been able to get a new 0% card once the previous deal has expired; and I had a new card 2 months ago and have just been approved for a mortgage... must be doing alright at least!

You can make a good chunk, although I've never thought about investing my balance into an ISA. It's going to be a recently high monthly minimum payment though, isn't it? So the interest has got to be reasonably high to compensate over the course of the 'loan'.
 
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sunama said:
Wait till you have repaid the Natwest card in 13 months, by which time you will turn 21, then hit Barclays for all they are worth.

These banks are making far too much money (sometimes using unreasonable rules, for example on cheques which take 3-5 working days to clear - utter nonsense) and this is one of the few times we can make money off of them. DONOT let this opportunity go begging.
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Yup, will do even though by then there will probably be a load of different offers about anyway.

Not sure if I'll even get any more credit , my credit limits together are about 30% more than I earn in a year :o
 
beamer said:
Assuming you meet all the minimum monthly repayments on time, I have yet to identify for certain whether the impact of utilising these 0% balance transfer deals in this way, is positive or negative on your credit rating. I personally, used them to get a £10,000 loan for my new car at "0%" for 2 years or so. (The balance transfer fees actually made it more like a 2% APR at the time - but that was better than even the student loan rates and below inflation - so it would have been stupid not to do it).

I seem to be passing credit checks for mobiles, utilities, house rentals etc ... without problems, since then - so I can only conclude that it hasn't negatively impacted my own credit history. What are other people's experience ?
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I believe that providing you keep repaying the credit card bills on time, having a CC will stand you in better stead than not having one (or more). Ive heard many people being turned down for credit who have never had a CC before. But once you have a CC, you build up a credit history and providing that you havent got a bad credit history, it will count for you. This is why I sometimes dont understand the thinking of why some people who say no to CCs. Providing you are responsible, you can make them work for you. And if you are clever you can even make money out of them.

If you have a bad credit history with CCs then obviously this will count against you when you are applying for more credit. Also, if you have a lot of outstanding money on your existing CCs, this also puts you in a bad position when trying to get more credit.
 
OoOverclockaoO said:
Did this with Natwest recently, 13 months 0% did £6k straight away , half into savings, half into ISA.

Barclays wouldn't give me a Platinum card as I am under 21 , so didn't take up their offer :p
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How did you manage that when the free rate is for purchases and not cash advances?
 
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