Last Updated on Mar 26, 2020 by James W


There’s a real battle going on in the world of credit cards at the moment, with various banks and credit card firms increasing the interest free period on their range of balance transfer cards. While it can seem like a great deal on the surface, the majority of people don’t understand the various fees involved in setting up a 0% transfer card.

The initial assumption is that transferring the balance of your existing card to a 0% card won’t cost you anything. While it’s true that you won’t pay any interest on the debt for the initial interest free period, there’s often a fee involved for transferring the debt. This can vary from bank to bank, but some card issuers charge as much as 4-5% of the balance to transfer it over.


Bigger Is Not Always Better

With some providers offering up to 3 years interest free on balance transfers, it can seem like the longest deals are the best on offer. That will all depend on how soon you feel you’ll be able to clear the debt. If you feel you’d be able to clear the credit card debt well within the interest free period, your best option would be pick up a card with a smaller balance transfer fee rather than the longest repayment period. Some cards with shorter interest free periods even have a 0% transfer fee, so if you’re confident of clearing the balance quickly you can save a lot of money.


Keep the Plastic in Your Wallet

While opting for a 0% balance transfer is a useful way of clearing your credit card debt, the temptation may be there to use your new card in the same way you used your old one. While you won’t be charged interest on the existing debt, any new debt will be subject to the normal interest charges you’d find on any other card.

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The interest rates on the 0% cards is often a little higher than the average, so if you absolutely need to accrue more credit card debt you should shop around for a credit card with a better interest rate. That way you’ll be charged less on any purchases you make.


Get Out Of There Quickly

Once you’ve paid off the debt on the balance you transferred to the new card, make sure you cancel it. The rates are usually far from competitive and the chances are you can get a much better deal elsewhere.

If you still have debt to repay as you approach the end of the repayment period, try to switch the balance to a new 0% card to buy yourself more time. Or, if you feel you’re in a position where you can start to use credit again, shop around for a better deal on a new card.

It’s certainly worth taking advantage of the increased repayment periods on the low balance transfer cards, but just make sure you fully understand the fees involved to make sure you get the best possible deal.





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