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By Helen Storey Staff Writer
Monday, 8 September 2008
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Balance Transfer Credit Cards: Should you be a tart or not?
What are the best balance transfer credit cards currently available?
Best 0% Balance Transfer Cards:
Best Life of Balance Cards:
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SO you’ve made it back from your holiday, and you’re back in the 9-5 grind. You’re still finding grains of sand in your breakfast, but the taste of margaritas has long faded, along with your tan.
To top it all off, your credit card bill made a thud like an Encyclopaedia Britannica when it hit the doormat.
Holiday excess can take its toll on your credit card, and the daunting prospect of paying it off can be made easier by transferring your balance to one of the many 0% interest on balance transfer credit cards around.
Is this the best plan in the long term? Perhaps a lower interest rate card could be best for you.
We check out the pros and cons of each, so you can decide which is the best way to rid yourself of your monthly minimum payments.
0% Balance Transfer Cards
On a 0% balance transfer card, as the name would suggest, you get 0% interest on all balance transfers for a certain amount of time.
Most of these deals are available for new customers only, so be prepared for an online sign-up process (you can sign up online directly from this site).
One of the best deals around at the moment for new customers is the Virgin Money credit card, which offers you 15 months of 0% interest on balance transfers.
If you’ve got debt that will take longer than the introductory offer to pay off, then all is not lost. You can simply apply for another one before the time runs out. The credit card technical lingo term for this is tarting.
 Compare 0% balance transfer credit cards here
Credit Card Tarting
Now that you’re a fully-fledged credit card tart, what should you know?
A combination of multiple and regular credit card applications, combined with persistent high debt may negatively affect your credit score. If you want to keep it intact, then space out your credit card applications. You may be a credit card tart, but try to avoid having 4 on the go at once.
Don’t forget to actually apply for a new card when you need one before the introductory offer expires. It’s best to start the application process a couple of months before your current one runs out. That way you’ve got ample time if something goes wrong with your application.
Don’t forget also that a transfer fee (usually 3% of the value of the transfer) is applicable on almost all balance transfer credit cards.
Low-rate Transfer Cards
If you’re not overly keen on doing a credit card dance between 0% balance transfer cards, then a low-rate balance transfer card might suit you more.
The idea is that you transfer your balance, and you can benefit from a low interest rate on that card until you’ve paid it off.
The Capital One Low Rate BT Mastercard offers an annual rate of 5.5% on balance transfers.
These cards are best for those who have a balance that will take many years to pay off, as well as people who just can’t be doing with the hassle of applying for 0% balance transfers every 10 or 12 months.
The caveat with this kind of card, however, is that whilst their balance transfer rates may be plastic fantastic, their rates on spending and cash advances will quickly undo all the good work you’ve done on paying it off in the first place.
The trick with this is to never, under any circumstances make any purchases. If you’ve got a fair amount of willpower, then put the card somewhere safe – like the back of your drawer - other than in your wallet.
Compare life of balance credit cards here
Fee-free Transfers
Be aware that the majority of cards will charge a fee to transfer your balance, which will be somewhere in the region of 3% of the total amount that you want to stick onto your new card.
This simple charge – which can really add up if you are tarting, could well make the difference between whether you should opt for multiple 0% balance transfer credit cards one after the other, or a single, simple Life of Balance transfer credit card.
Using our ‘balance transfer’ tool on the Compare Credit Cards page will actually work out for you which option will save you more in the long run.
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