mo’s guide to Balance Transfer Credit Cards
Transfer existing debts to 0% balance transfer credit cards
Taking out a new balance transfer credit card means you can use it to pay off debt on old credit and store cards. That doesn’t mean the debt goes away, it just means you have moved your debt to the new credit card, usually with an introductory interest rate offer
This is how most balance transfer credit cards work:
- An introductory balance transfer interest rate on new transfers, typically 0% for a set period of time
- A balance transfer fee. This is usually a percentage of the amount you transfer. For example, a £3,000 balance transfer with a balance transfer fee of 3% would cost you £90 which is added to the balance of your new credit card
- A “go-to” interest rate. This is the standard retail interest rate that applies on your credit card when your introductory rate comes to an end. This is where most people come unstuck by not switching before the introductory rate comes to an end.
Do the smart thing - get set before you apply
- Aim to clear the debt before the end of the introductory rate or transfer again to avoid high interest charges
- Repay at least the monthly minimum repayment on time or risk losing your introductory offer
- DO NOT SPEND OR WITHDRAW CASH ON A BALANCE TRANSFER CARD. The retail rate is typically more expensive than a standard credit card and can leave you in a worse place then when you started.
- Be Smart - Use monva’s Eligibility Match to check you meet the lender criteria, then use lender pre-approve checks before applying to avoid harming your credit file