Balance transfer credit cards

There are a number of factors that affect your credit score, including the number of credit applications you’ve made, your employment status and whether you’re on the electoral register.

As such, making a new credit application – even for a balance transfer credit card – can cause an initial drop in your credit score. However as with any kind of credit product, if you make your repayments on time your score should eventually start climbing again.

When you compare balance transfer credit cards, pay attention to the following factors to help you decide which card to take out:

• Your 0% interest period: This is the length of time you won’t pay any interest on your balance
• The standard APR after this period: This is the rate you’ll be put on once the introductory 0% interest period ends
• Any fees you’ll need to pay: There may be a fee for transferring your balance over as well as a monthly or annual usage fee

When you get your new credit card, you should destroy any old ones you have – even though they may be expired or the account may be closed, an identity thief can still use the information on the card.

You should be able to transfer any existing credit card balances on to your new credit card.

Most providers will let you transfer balances between £100 and £10,000 to a new card – at most, around 90% of your current credit limit.

Balance transfer fees are generally given as a percentage of the overall amount you’re transferring – this will usually be between 1% and 3%, but could range anywhere from 0.5% to 5% of the total sum.

Divide the amount you transfer by the number of months your interest-free deal lasts for. The result is the amount you need to pay each month to clear the debt.

If you do not clear the balance by the end of the 0% period, you will be charged interest on what you owe.

You will have to make at least a minimum payment each month.

If you know you’re not going to clear the balance within the 0% period, you could consider transferring to another card with an interest-free period.

Always pay the minimum monthly payment on time to avoid penalties and interest charges.

Avoid exceeding your credit limit or you’ll face penalties such as losing your interest-free deal.

Make the necessary payments to the card or cards you move the balance from, especially if you do not clear the balance completely.

If you do not clear the balance by the end of the interest-free period, transfer that sum to another 0% balance transfer card.

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