Credit Card Balance Transfers

nero120 · 2 Oct 2006 at 22:47

Just a quickie, but can someone tell me what is the maximum balance transfer you can take when applying for a new credit card? Is it written in the small print or can you put in any figure which is then considered when the application is processed?

nero120 · 2 Oct 2006 at 22:51

oneilldo said:
I think It depends on the applicant and the credit limit they give you based on your circumstances.

Thats what I thought, but in the application it actually asks you for the amount of balance to transfer, yet doesnt stipulate a maximum. Whats the normal thing to do if wanting to get the maximum balance?

nero120 · 2 Oct 2006 at 22:58

McDaniel said:
There is no specific maximum however they might not provide you with a credit limit high enough - depends on your credit rating

Tis what I thought. Do you know a good reasonable figure to start with? My credit rating is exemplary. Time I made it work for me!

nero120 · 2 Oct 2006 at 22:59

OoOverclockaoO said:
Transfer up to the limit on your card

Watch out, some cards have a 2%-3% fee for balance transfers. I currently use M+S More card, 0% for 9 months and no fee!

Only other one I believe with no fee is Natwest...

Thanks for the tip. Gotta watch that balance transfer fee!

nero120 · 2 Oct 2006 at 23:00

starscream said:
It's normally 95% the credit limit of the card.

Maximum positive balance: £99,999

nero120 · 2 Oct 2006 at 23:21

McDaniel said:
The majority of Credit Cards max limits are around £15,000

There are the odd few who have 20k+ limits, but 15k is the stnadard max - depends on your financial status!

So what you're saying is I might as well write £20,000 into the application and see how much they give me based on my (fantastic!) credit rating?

nero120 · 2 Oct 2006 at 23:38

Okay, I should elaborate a little. I plan to use a credit card with 0% interest on balance transfers (for a limited period) and little or no charges for BT, to put as much money I can get out of the card into a high interest savings account, thereby accuring interest on the balance and paying off the minimum each month to avoid paying interest, then finally paying off the total balance before the interest free period is up! Also known as Stoozing.

My question was related to doing a balance transfer to a card that has no debt on it and allows a no-charge withdrawal on positive balances to a savings account.

So, with respect of this, how much of a balance transfer should I ask for on the 0% interest on balance transfers card?

nero120 · 2 Oct 2006 at 23:44

McDaniel said:
Thats not a balance transfer - a balance transfer is something ONTO the new card from a current Card.

What you want to do is withdraw the maximum Credit available - stick it into a high interest account while having a 0% interest and paying just the minimum payment?

Yes?

Heh, no! The balance transfer is from the card with 0% on balance transfers to the card that allows free withdrawals on positive balances into savings accounts. I don't think there is a card that allows you to withdraw cash or funds straight into bank accounts for free?

nero120 · 2 Oct 2006 at 23:50

starscream said:
Most companies are now clamping down on what you are trying to do, but there is a cunning way around it. Egg let you do balance transfers to current accounts so what you can do is get a 0% credit card, balance transfer as much as possible to an egg card, then move that onto a current/savngs account.

Ding ding ding! Correctamundo! So, back to the "balance transfer as much as possible to an egg card" part... How much do you ask for?

nero120 · 3 Oct 2006 at 00:06

starscream said:
How much is the limit on your Egg card? I suppose a good estimate would be around the same ammount.

Applied for it today, so haven't got the card yet. Haven't been given a limit as yet, I guess I'll get it with the card. However, the limit on my morgan stanley card (for all purchases) is only £4800.

What are the chances of getting a £15000 balance transfer as McDaniel suggested?

nero120 · 3 Oct 2006 at 00:30

starscream said:
It depends on so much. What is your age, salary and do you have a mortgage?

Age: 25
Salary: £30,000
Mortgage: Nope

No outstanding debts (except student loan)
Never missed a CC payment.

nero120 · 3 Oct 2006 at 00:51

starscream said:
Your age and lack of mortgage will be the things that told you off the really big credit limits. From cards I've seen issued in the past, I would guess at around 6-8k.

Thanks for the info. So, on the card application should I write £20,000 as the balance transfer amount anyway and see if they allow it? I guess they will tell me after that how much of a balance transfer they will allow, right?

nero120 · 3 Oct 2006 at 02:04

stu.artd said:
Just remember that when you transfer the balance onto the card you'll also get charged 2% of the amount transferred as the fee for doing this. The card co's started this ages ago to limit people doing similar things to what you're doing.

Not all cards charge for balance transfers.

I'd reckon Egg will offer no more than £5K as your inital limit, but likely less than that as they don't tend to like starting poeople with high limits. As has been said they start low then ramp them up after special offers finish, or you display the ability to spend high on the card and pay it off (ie not balance transfer it) promptly.

Note, I dont want to balance transfer from an egg card, I want to balance transfer to an egg card from another card (with 0% interest on balance transfers for 6 months and no charge for BT)

nero120 · 3 Oct 2006 at 11:40

stu.artd said:
Egg do charge for balance transfers onto their card, they charge 2.5% of the amount transferred during the initial 0% stage. They don't charge the fee on balance transfers made at their standard APR but that's not what you're talking about doing. It's in their FAQ page.

Im not sure we are on the same page, just to be clear, the money will go from the credit card with a good 0% interest on BT and no BT charge, onto the Egg Money account. From there, into a high interest savings account. I can't find anywhere that it says that you are charged for a positive balance on Egg Money?

nero120 · 3 Oct 2006 at 12:12

Pug said:
seriously, the amount you'll make from this will be pretty insignificant as to warrant it (imo) pointless - decent savings accounts will offer what, 5% APR? Factor in the 2-2.5% charge for transfers you would have to pay after the initial period runs out, if you wanted to carry it on ast the 6 months and then thats before the tax man takes a cut of your 5% savings account. You'll barely stay above inflation, and the length of time you'll be doing it over will mean it'll be pretty pointless (all imo of course)

True, but every little helps as they say. Not to mention it helps me stay financially savvy and it will build up as my credit limit increases. I think at the moment, that's an extra £500 before tax. Not much, but it's (relatively) free money!

The only way it may offset the worth is to use a CASH ISA - but then you're limited to a pretty small amount each year anyway. Think I was allowed £7k a year, thats so much cash ISA, and the rest as tax free share options...

I've already done these for this financial year, just looking for ways i can maximise my income.

nero120 · 3 Oct 2006 at 12:17

stu.artd said:
I think I get what you mean. You're going to be transferring debt from a credit card to an egg money account as that incurs no transfer fee.

I had thought you were getting an Egg credit card and transferring debt from another card onto that. I hadn't consdiered Egg Money as you can't transfer from an Egg credit card into an Egg money account.

How are you going to get the debt/balance to transfer from the first card though ? Most cards don't let you withdraw to a bank account without fees, and you can't be doing it using Egg Money as that's only coming into action once you have an initial balance to transfer from somewhere else.

You can do a balance transfer onto a 0% BT card, from the Egg Money (incurring a positive balance in the egg money account and a negative balance on the 0% card). Then, you can transfer the positive balance off the Egg Money into a high interest savings account leaving a 0 balance on the Egg Money account. You keep up minimum payments on the 0% card from your savings account to avoid paying interest.

nero120 · 3 Oct 2006 at 12:37

stu.artd said:
That explains that then

I'd double check the T's and C's regarding the no transfer fee on the 0% card though, as they may view that as something other than a standard balance transfer (maybe a money transfer) due to it going to a non credit card account.

Definitely. But, on the whole there are a few cards that do not charge for a BT, regardless on what other credit card it goes. Only if it goes stright into an account do you have to be extra wary.

nero120 · 3 Oct 2006 at 17:05

tarunmistry said:
Stoozing (for anyone interested http://www.stoozing.com/full.htm) has a bunch of problems I hope you are taking into account.

1) Most credit card companies now impose a 2% balance transfer fee, meaning you can't keep getting a new card and switching money between them for free. This 2% will eat into your profits.
2) You need to get lots of credit to get a decent Stooz pot, unfortunately this destroys your credit rating. I.e. asking suddenly for lots of credit appears negatively in your favour. The major warnings here are, if you starting stoozing a lot, don't expect to be able to get a mortgage, if you have a mortgate then go right ahead.
3) You HAVE to make sure you transfer money before any payments or interest is accrued and maintain your minimum payments (you still have to keep paying these!) otherwise you'll get hit with a huge interest bill.

If you can keep on top of all that and have done the sums, go for it. If you haven't already, give the above site a good read.

Don't worry, I've done my research! And yes, you do need a decent credit limit to make it worth it, but as I said before, every little helps. It is still a decent way of adding to your income. And since I dont need to borrow money now or in the forseeable future, I might as well make the most out of my credit rating (it is only damaged if you fail to keep up regular payments - not by taking advantage of 0% interest offers).

Finally, i would suggest that by having to ask such questions here, you may not YET be ready to try this.

My initial question was about balance transfers. Now I know not to bother putting them on the CC application form I'm good to go.

nero120 · 3 Oct 2006 at 17:51

tarunmistry said:
Your credit rating is actually damaged the more times you ask for credit and/or are refused it.

Everytime u apply for credit, it is logged on your credit record along with a date. The more applications for credit you make, the worse your credit rating becomes. Obviously theres a normal range but when you go outside this, its noticed.

It was all on that stoozing site link i gave before.

Taz

Yes, but that is assuming you want credit for anything other than stoozing. Obviously, the more cards you apply for the less your credit limit will be, but it's all free money. Also, bear in mind that these records will (usually) only affect your ability to get credit for 6 months - 1 year.

Check out the Egg Money into Egg Savings cashback trick for an easy £200.

nero120 · 4 Oct 2006 at 10:28

tarunmistry said:
Can you provide more details?

Taz

Surely! You need to have a positive balance in your Egg Money account and also have an Egg Savings account. If you request a BACS transfer of funds (over the phone or by secure message) from the money account into the saver, it counts as a transaction and you earn 1% cashback on it. However, it is capped at £200 a year. So that means if you move £20,000 from your egg money account, into your egg savings account, then into your high interest savings account, you get £200 for free! However, Im sure to some that £200 extra gross income isn't worth the hassle