Credit Cards UK - Find, compare and get information on credit cards
Credit Cards UK - Find, compare and get information on credit cards |
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Credit card balance transferYou will almost certainly have heard the phrase ‘balance transfers’ mentioned in the advertising banter of one credit card or another. But what exactly is a balance transfer, and is it for you? Read on for all the information you will need to be clear on both these points. Warning: fsockopen() [function.fsockopen]: php_network_getaddresses: getaddrinfo failed: Name or service not known in /sites/credi2/htdocs/espottingMod2.php on line 85 Warning: fsockopen() [function.fsockopen]: unable to connect to affiliate.espotting.com:80 (php_network_getaddresses: getaddrinfo failed: Name or service not known) in /sites/credi2/htdocs/espottingMod2.php on line 85 What is a balance transfer?A balance transfer is where the outstanding debts from one credit card are moved to a new card, with the provider of the new credit card paying off the money owed on the old card. The amount you owe will be the same, only you will owe it to a different credit card company. At this point you might be wondering what the point is in a balance transfer, after all you will end up owing the same amount, albeit to someone different. Well the answer is simple – a balance transfer could save you money.How can a balance transfer save me money?With so many credit cards competing for your custom, the card companies need to offer incentives for you to switch to their card, the most popular incentive is to offer 0% interest rates for balance transfers. If you have outstanding debts on your current credit card you will almost certainly be paying interest on that amount, often as much as 18% - moving this debt to a card offering 0% APR on the transfer has the obvious benefits.This may seem to good to be true, swapping from paying a large APR to nothing at all, but the card companies are keen to get your custom and will bear this cost in the hope that you will stay with them and so earn them money in the long run. There are pitfalls to be aware of however, check the term of the zero percent offer – if it is a fixed term then you will need to be sure that you can pay off the amount within that period, or at least ensure that the standard APR is at least as low as your current card’s rate. Some credit cards offer nought percent on the life of the balance, meaning that you will never pay any interest on the amount transferred – although you will need to check what the company classes as the ‘life of the balance’ as there may be restrictions on this. You will also need to check into if there are any charges related to the balance transfer, as although the APR may be zero, this is not to say that it is completely free. Always check through the small print, and be sure to ask the card supplier to give you a complete listing of the costs involved – in many cases there will be none but you do need to check. Is a balance transfer for me?If you do not have any, or only rarely have, outstanding debts on your
credit card then a balance transfer is probably not for you. If however
you have relatively large debts then moving these to a card offering nought
percent APR has the potential to save you considerable amounts of money.
Don’t forget that the APR of the transferred balance is not the
only aspect you need to consider, as the interest charges on new purchases
are also a very important factor. If you are looking for a loan other then a bridging loan, we recommend that you visit Loans UK. |
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