What is a balance transfer credit card?
A UK balance transfer credit card allows you to transfer your existing credit card debt from one or more cards to a new one, usually at a lower interest rate or even 0% during a promotional period. This type of credit card is somewhat similar to a loan refinancing service. A money transfer credit card will help you pay off debt faster and save on interest payments.
Let's consider the main properties that most clearly characterize a credit card with a balance transfer:
- Promotional Interest Rate. Analyzing the offers of such loans on the market, you can see that most credit cards with a balance transfer offer a 0% interest rate for the initial period. The duration of such a period can be different, a minimum of several months, and a maximum of more than 2 years. After this period, the credit card will have a standard interest rate on any balance.
- Fee for balance transfer. When issuing a balance transfer card, you should pay attention to the money transfer fee. After all, for most credit cards of this type, a commission is provided, which usually ranges from 1% to 3% of the amount of the transfer
- Credit limit. The amount you can transfer depends on the credit limit on the new card. Therefore, be sure to consider this parameter. After all, a situation may arise when you will not be able to transfer the entire debt, only part of it (within the credit limit of the new card).
- Eligibility: To receive a balance transfer credit card, the client must meet the bank's requirements. In most cases, the bank's decision is influenced by the credit rating and financial history, customers with a good credit history have more chances.
- Redemption. It is best and most profitable for the customer to pay off the transferred balance before the promotional rate expires, so as not to pay high interest on the balance.
As an alternative, you can also take out a personal loan. Your possible expenses:
Personal loan calculations for 1 year (example)
| Amount, $ | Rate, % | Accrued %, $ |
| 5,000 | 9.60% | 260 |
| 5,000 | 10.60% | 287 |
| 5,000 | 11.60% | 314 |
| 10,000 | 11.70% | 634 |
| 10,000 | 12.70% | 688 |
| 10,000 | 13.70% | 742 |
| 20,000 | 13.80% | 1,495 |
| 20,000 | 14.80% | 1,603 |
| 20,000 | 15.80% | 1,712 |
| 25,000 | 16.20% | 2,194 |
| 25,000 | 16.90% | 2,289 |
| 25,000 | 17.90% | 2,424 |
Who offers the best money transfer credit cards?
Money transfer credit cards are a popular option in the UK for those looking to transfer money directly to their bank account, often to pay off an overdraft or other debts at a lower interest rate. These cards typically offer a 0% interest period on the money transferred, though there is usually a fee for the transfer.
Here are some of the best options available:
- Virgin Money Money Transfer Credit Card
- MBNA Money Transfer Credit Card
- Tesco Bank Money Transfer Credit Card
- Post Office Money Transfer Credit Card
- Sainsbury’s Bank Money Transfer Credit Card
- Barclaycard Money Transfer Credit Card
See the similar FAQ about UK banks:
- What is an HSBC APR rate for a credit card?
- What should I do if I have lost a bank card from Clydesdale Bank?
- What should I do if I lost my card in Bank of Ireland?
- What should a client do if he has received a suspicious fraud text message or scam email letter?
- Where do I find my HSBC application status?
- Where do I find the Lloyds bank card security code?
- Why a Lloyds bank card transaction can be declined?
