Balance transfer credit cards
Posted January 25th, 2009 Balance transfer credit cards are becoming quite popular with those who want to pay off their credit card debts while saving significantly on the interest charged. There are several cards that charge no interest at all but do demand a handling fee, usually about 2% of the balance you are transferring.
When you decide which balance transfer credit card you would like, be aware that many of them have a requirement that you move your debt onto the card within sixty days of opening the account. Be sure that you know how long your have to pay down your debt before the interest rate increases. Some cards will charge you little or no interest for just six months; others extend the deal for twelve months or longer.
If you expect to take longer to pay off your debt than the deal allows, you will have to find another card to take its place and then another until the debt is eventually paid off. Or you can find a lifetime balance transfer card that charges you a very low, flat interest rate until you pay it off completely. There is usually a transfer fee but that low interest rate for as long as you need it is worth the small expense.
Whether you have conventional transfer credit cards or a lifetime balance transfer card, make sure you know the rules about new charges you might be tempted to make. Some cards will change your low interest rate to that of a more conventional card if you add new charges to the card. Others will quietly shove the new charges into the background where they accumulate interest while your monthly payments are applied not to the entire new balance but just the old, low interest one. This is a favorite trick of credit card companies that you’ll have to be leery of.
When you apply for and get one of the new balance transfer credit cards, be sure that you don’t miss a single payment or even make a late payment. Most cards’ terms and conditions state that late or missed payments will automatically forfeit the low or no interest rate of the card. And it’s up to you to read all the fine print that states such rules; the credit card companies won’t go out of their way to make sure you know how to play the game!
One of the things you’ll be offered with balance transfer credit cards is payment protection insurance, or PPI. This will sound like a great idea in case you lose your job, have an accident or illness that prevents you from working or if you die. The PPI would make your payments for you should any of these things occur but they are outrageously expensive and adds about ten percent per year to the cost of your credit card.
When your special interest rate is about to expire, be sure to allow yourself at least six weeks to apply for and obtain a new low or no interest card. You can transfer what’s left of your debt onto that one and avoid paying usurious interest!
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Comparison of Top 10 Credit Card Offers
| Credit Card | Card Details | Interest Rate | Cash Advance Rate | Balance Transfer Rate | Annual fee | Interest free days | ||
|---|---|---|---|---|---|---|---|---|
 Halifax All in One Credit Card |
The Halifax All in One credit card offers a great introductory rate, and is perfect for saving you money now as well as in the future. | 15.9% APR | 27.95% p.a. (variable) | 0% for 9 months | No Annual Fee | 59 Days interest free |
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 Virgin Credit Card |
As well as a great rate, the Virgin Credit Card comes with:
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16.6% APR (variable) | 27.9% p.a. (variable) | 0% for 16 Months (2.98% fee on balance transfers) | No Annual Fee | 50 days on card purchases |
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 Capital One Classic Visa |
This card is designed for people with bad credit ratings, this is why the rate is quite high. |
Typical 34.9% APR variable | 34.9% APR | 34.9% APR | No Annual Fee | 56 days for purchases. 0 days for balance transfers and cash. |
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As well as earning Flying Club miles which you can spend on brilliant rewards like flights, upgrades, car hire and more, a Virgin Atlantic Credit Card gives you up to 46 days interest free on card purchases. |
17.9% APR typical rate | 20.9% p.a. (variable) | 0% for 6 months (2% handling fee) | No Annual Fee | Up to 46 days on card purchases only. |
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The Virgin Prepaid MasterCard from Virgin Money is a prepaid Mastercard that you can add funds to, and use these funds for normal purchases. |
N/A | N/A | N/A | N/A | N/A |
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5% cashback on purchases in your first three months (up to £4,000 of spend). Thereafter, earn 0.5% on the first £3,500, 1% on £3,501 to £10,000, and 1.5% after £10,001. |
18.9% p.a. | 27.9% p.a. | 18.9% p.a | No Annual Fee | 56 days for purchases. 0 days for balance transfers and cash. |
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Vanquis Visa Card is designed for people with no credit history or who have previously had bad debt. Representative 39.9% APR (variable) |
Representative 39.9% APR (variable) | 39.9% | N/A | No Annual Fee | Up to 56 days on card purchases only |
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The award winning prepaid card with no credit check or bank account needed. | Funds in your Account will not earn interest | Prepaid only - N/A | Prepaid only - N/A | £59.40 p.a. (£4.95/month) | Prepaid only - N/A |
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