Balance Transfer Credit Cards

If you have one or more credit cards, or store cards, with debt on them you might want to consider looking into balance transfer credit cards. Cards such as this are a great way of clearing off debts and here is all you need to know about this specific type of credit card.

How Can Balance Transfer Credit Cards Work For You?

Balance Transfer Credit Cards

The balance transfer part of the name should give you a big clue as to how this type of credit card might help you get your finances back under control. Put simply the card allows you to transfer the balance from any other credit cards or store cards to the new card. While this is all well and good, you still have to pay back the amount on the new card, so how does this help?

The key to balance transfer credit cards working in your favor is if the card you take outcomes with a zero percent interest rate and/or a lower rate of interest than what you are currently paying on your credit card. This means that any balance you transfer over onto the new card you can, hopefully, pay off during the interest-free months without interest being added. This means any money you pay back each month on the credit card comes entirely off the balance with no interest added.

Balance transfer credit cards could still benefit you even if you cannot afford to pay off the card during the interest-free payment period.  This is down to the fact that the rate of interest will be lower than that of the original credit cards you transferred the balance from.

Combine Several Cards into One with Balance Transfer Credit Cards

While the balance transfer card helps you to save money while paying off the balance of credit cards and store cards with an interest-free term and lower APR, there is another benefit to it. This is due to the fact you can transfer the balances from all your other credit cards onto one single card. This is providing, of course, you have a credit limit on the new card that allows you to do so and taking into account there is a limit as to how much of your credit limit you can use on balance transfers.

This means you no longer have to worry about having two of three credit card repayments to worry about and remember to pay on time each month. It also means that on your credit rating the balance from the credit cards you transferred will show up as being paid on those cards. This is thanks to the new lender paying off the balances on your old cards. You then only have to worry about repaying the one credit card each month.

Balance transfer credit cards should not be confused with the money transfer credit card. The money transfer card does not allow you to transfer the balance from your old credit or store cards. Instead, it allows you to transfer money from the credit card to your bank balance to use as your own money on whatever you want to spend it on.

Choosing the Most Suitable Balance Transfer Credit Cards for Transferring Your Balance

There are many ways to look for a suitable credit card for balance transfer. You could make a comparison online using a popular search engine, but this takes a great deal of time and hard work. Even then you might not find the most suitable deals for your needs. There is an easier way. We can help to match you with lenders for your specific needs.

We don’t offer finance ourselves. Instead, we work alongside numerous lenders offering a range of financial products, including balance transfer cards. There are many benefits to checking out credit cards with our assistance, including:

  • We find lenders offering credit cards for you to compare for the most suitable deal;
  • Highly competitive rates and deals are offered by the lenders we work with;
  • The application is quick and easy;
  • The lenders we work with offer credit cards even if your credit rating is poor;
  • Compare credit cards and their terms and conditions in one easy place.

Save Time and Stress When Looking for a Credit Card

The first benefit is that we do all the hard work of finding suitable lenders and credit cards on your behalf. This saves time and stress on your part. It allows you to sit back and compare lenders for the best deal in your own time and at your own pace.

Competitive Rates and Deals on Credit Cards for Balance Transfers

The lenders we work with offer credit cards with interest rates and deals that are highly competitive. Finding the longest 0% interest rate deal on a credit card, when wishing to transfer the balance, is essential as it gives you more time to pay off the balance without having to pay interest. The lenders we match you with can then be checked out by you to find the best deal.

Fast Online Application

After we have helped you to find the best credit card deals for transferring your balance with our lenders applying for the credit card is fast and simple. The application can be made there and then within minutes.

Poor Credit Rating is Generally No Issue

If your credit rating has taken a turn for the worse since you were last approved for credit you don’t have to worry. The lenders we work with don’t focus entirely on your credit rating. Instead, they take your verifiable income into account. This means you might even be able to take advantage of a balance transfer card with a relatively good deal, even if your credit rating is not perfect.

Compare Cards and Lenders in One Place

As you will see below there are certain factors that you need to consider when looking for and applying for a credit card. You will be able to read the summaries for each of the credit cards offered by our lenders online, so you know exactly what is being offered to you. All of this is available in one single place. This means you no longer have to search on your own, keep different websites open while you compare or keep notes.

What to Take Into Account When Considering Balance Transfer Credit Cards

balance transfer credit cards uk

When considering taking out a new credit card to transfer the balance from your old credit cards or store cards there are some things to be aware of and take into account. These include:

  • Lenders usually state a minimum balance to transfer;
  • Lenders generally ask you to transfer money from old cards within a certain period of time from taking out the card;
  • The total amount cannot be over a certain percentage of the credit limit allowed on your new card;
  • The lender will include balance transfer fees, which are also known as handling fees;
  • Interest will be payable once the interest-free period has come to an end.

The Minimum Limit for Transferring

Lenders will state a minimum amount of money that can be transferred to the new credit card. This is typically around £100 but may depend on the lender you take the card with. This means you would not be able to do a transfer on an older card that only had a balance of say, £80 on an old credit or store card.

Balance Transfer Has to be undertaken within a Certain Timeframe

When transferring a balance from older credit or store cards to a new credit card bear in mind that the transfer needs to be made within a set period of time. The timeframe may differ between lenders; generally, it is within a region of 60 to 90 days. Therefore it is essential to check the terms and conditions applicable before taking out the card.

There Is a Limit on the Amount That Can Be Transferred

Bear in mind the lender will set a maximum amount of money that may be transferred to your new credit card. Again this will vary on the lender you choose to take the card out with but it is generally in the region of around 80% to 90% of the credit limit available on your new card.

Balance Transfer Fees Also Known as Handling Fees

If you are considering transferring a balance to another credit card to repay the debt off and save money you should consider any balance transfer fees associated with the card.

This is the handling fee and is generally a percentage of the amount you are transferring to the new card. This fee is added on to the balance on the new card, which is paid off by you. This fee might differ between lenders. This has to be factored in when considering any interest free period due to the fact it will boost up the balance you transferred.

An example of this would be if you transfer a balance of £1,000 onto a new credit card with a transfer fee of 3%, £30 would be added onto the total balance so you would have to repay £1,030. Of course, the balance on your credit card would increase if you kept using the card.

Interest will be added onto the Balance When the Interest-Free Period Ends

If you cannot afford to repay the credit card within any interest-free time period you should bear in mind that interest will be added onto the balance once the interest-free period comes to an end.

Transferring the Balance to Your New Card

Lenders generally make transferring the balance from another card to your new one extremely easy. In many cases when you apply for a balance transfer credit card the lender will ask for details about the balance you want to transfer. In this instance you will need the following:

  • The amount you owe on your credit card or store card;
  • The name of the lender of the credit card you are transferring money from;
  • The account number of the credit card.

Following this, providing your application is successful the lender of your new card will pay off the existing balance of your old credit card or cards and add it onto the new one you took out with them.

Some lenders will also allow you to make balance transfers, providing it falls within the new credit limit, online, through an app or by making a phone call. As long as you do it within the agreed time frame, this again may vary between lenders.

To Summarise

The main points to bear in mind when considering taking out a credit card that offers a balance transfer are:

  • This type of credit card is aimed at those who want to transfer their existing credit cards or store cards debt onto a new credit card to save money;
  • The new credit card should offer a lower APR than the current ones;
  • Compare credit cards for the longest 0% deal on paying off the balance transfer along with the lowest transfer fees;
  • Compare the minimum and maximum amount the lender allows you to transfer from other cards;
  • Try to pay off the balance on the new credit card within the interest-free time frame period and no interest will be paid;
  • Don’t keep spending on the new card, adding additional debt;
  • You will only have one credit card to repay instead of two or three;
  • Just as with any other type of credit card you should never be late with a repayment or miss a payment as this affects your credit rating negatively and may mean obtaining credit in the future is more difficult.

Here at Bonsai Finance, we can help you to find the most suitable balance transfer credit cards for your needs. We work with lenders who offer competitive rates of interest on credit cards regardless of whether your credit rating is in good standing or not. We can match you with lenders and you can then compare them.