Balance transfer cards are for moving your existing debt from one credit card to another, without paying any interest for a set period of time. You’ll normally have to pay a fee to transfer your balance.
What should I consider when applying for a balance transfer card?
Before taking out a balance transfer card it’s worth weighing up the pros and cons of what the card can offer you. Here’s a round-up of what you should bear in mind:
- Check your credit score before applying: Reduce the chances of getting turned down by checking your credit score first. Credit Monitor lets you see your score and gives you personalised tips to help improve it – all for free. A better score could give you access to a wider range of better deals.
- Watch out for expensive balance transfer fees: While balance transfer cards can be cost effective during the interest free period, find out what the balance transfer fee is. It’s usually around 3%, which if your outstanding debt is high could add a fair amount to your overall total.
- Make a note of the end date of your interest-free period: The 0% term gives you time to pay off your debt without paying any interest. When the interest free period comes to an end, the card provider will start to charge you interest. So you’ll want to get a card that gives you enough time to pay off your debt before the 0% period ends.
- Will your balance transfer meet your lender’s acceptance criteria: You can’t usually transfer a balance from one card to another if they are both issued by the same provider, or even part of the same banking group, so it’s worth checking if the debt you are moving can be switched over.
Once you’ve been accepted for your balance transfer card, ensure you transfer your balance within the promotional period outlined in your terms and conditions, for example some lenders might state that you need to transfer your balance within three months of receiving the card.
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