Focus on: NEW 0% balance transfer card for ‘average’ credit scores

A new balance transfer card from Capital One, which launched on Friday 17 February, is giving borrowers with ‘average’ credit scores a rare chance to pay 0% on balance transfers. We take a closer look at the deal.

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What’s the deal?

The Capital One Balance card is offering 0% on balance transfers until September this year to consumers with ‘average to good’ credit histories.

The Balance card comes with a relatively low balance transfer fee of 1.7% and carries a maximum credit limit of £1,500.
 
You will need to be aged over 18 to apply for the card and will be most likely to qualify if you are on the electoral roll and have some history of managing credit – even if that does include a County Court Judgment (CCJ) or previous defaults on payments.

Any catches?

The main catch with this card is that the 0% balance transfer period only lasts for a maximum of seven months – up until you receive your September statement. This compares to as long as 22 months offered by Barclaycard Platinum card with extended balance transfer – but that card that is only available to applicants with good credit scores.

And because Capital One’s Balance card is aimed at those with less-than-perfect credit scores, it comes with a much higher interest rate than more mainstream credit cards charge. For example, when your 0% period on balance transfers ends, interest on the debt will shoot up to a representative APR of 34.94% (variable). The same representative APR applies to purchases and cash withdrawals from day one, so you’ll need to be certain you pay off your balance in full each month.

Finally, the Capital One Balance card is still only available to those with average or good credit histories, which means if you have a bad credit history you are still unlikely to be accepted.

For example, if you’ve been declared as bankrupt in the last 12 months, you’ve had any CCJs or defaults in the same period, or you have no history of borrowing the UK at all. In this case, you are still likely to remain excluded from the 0% balance transfer credit card market.

Verdict

As 0% balance transfer deals are not usually available to borrowers with less robust credit scores, Capital One’s Balance credit card is a very welcome addition to the market.

And, as well as providing some temporary free borrowing on existing debt, it could also help rebuild your credit score so long as you use the card wisely and pay your balance every month. This means that next time you could qualify for a card with a longer balance transfer period or lower rate on purchases.

Top tip

Being rejected for credit can have a negative effect on your credit rating, so you shouldn’t apply for the Balance credit card or any other if you think you are likely to be turned down.

MoneySupermarket’s Smart Search tool can help you limit the chances of being rejected by giving you a score out of 10 based on how likely you are to be accepted for a range of cards.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct

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