Short Term Loan Discussion Area

Dear Martin,

I recently applied for, (and got!), 2 new cards, Virgin 0% for 9 months, and Barclaycard, 0% until August 2005, (I think).

I actually got the Virgin card as a result of a semi-junk email, to help bridge the gap between buying my new car and selling the old one, but it has turned out to be very useful.

As you say in your article, you can use the MNBA cards, (of which the Virgin card is one), to make free Super-Balance Transfers to your current (or indeed savings) account.  What the article doesn't mention however, is that with the Virgin card, you can make as many separate Balance Transfers, or Super Balance Transfers, as you like, (with no fee), for the whole 0% period.  (Barclaycard only allow you free Balance Transfers for the first 60 days after you open your card account.)

Also, as I think you have mentioned elsewhere, it seems that some cards, including Virgin, will allow you to transfer up to 90% of your remaining credit limit each time, so you can get progressively closer to your actual credit limit each time you make a BT/SBT.

(This is just my Virgin card, Barclaycard will only let you use a finite amount of your credit limit on balance transfers,  ie. you have to leave 10% of your total credit limit available.)

Anyway, the upshot of all this is that there is nothing stopping you from making a new SBT each time you have made your minimum payment, (currently only £5.00 on my balance of roughly £5,000, anyway), and squeezing the maximum benefit out of your interest-free borrowing.

(I double-checked this with Virgin on the phone, and they said that was totally fine, I could do it as many times as I liked - 'Good on you', seemed to be the attitude!)

You will also be glad to hear that I am of course making full use of the fact I have two 0% cards, one of which allows me to make an unlimited no. of Super Balance Transfers into my savings account.  My next task is to find another savings account with better terms to stash my cash and earn a nice bit of interest before I have to give it all back again - or indeed find another credit card company who wants to give me another 0% card and keep the pot boiling!

*****

Now, I know it's not really relevant to this particular discussion thread, but I hope you will excuse a bit of a rant about good financial habits, because, as you will see, I have very good reasons for believing that managing your credit cards properly is really important. (NB. Michael, I've just re-read what follows, and wanted to let you know that my rant is completely unrelated to your post. I'm not knocking using credit cards in the way they were intended! )

I use credit cards wherever I can, on the grounds that the longer the money is in my bank account the more interest it is earning.

Also, I always pay the balance on my 'spending cards' off in full every month - I have set up direct debits to help me do this, and to make things easier for myself in general. (It's also easier to do if you don't spend any more than you expect to actually have in your bank account! ::))

(I don't use my 0% cards for spending, it can get complicated if you're not careful, and you can slip up.)

I can honestly say I have never paid a penny's interest on a credit card in my life. I always tell people it is against my religion to give MY money to banks and financial institutions! It also seems to have been very good for my credit rating.

Now this all sounds like good advice for people with plenty of money, but not much use for the less well-off. Not so! I am actually a single-parent, working part-time and receiving benefits, and a non home-owner. And, apparently I have an excellent credit-rating!

As a result of my good financial habits, I had no problem getting a loan for a large part of the cost of a (nearly) new car, and recently managed to get two new 0% credit cards with credit limits of £5,000 and £3,500. And I didn't have to tell any porkies about my income, either!  :P

I know it does sound ridiculous when you consider my circumstances, but because I live well within my means and manage what money I do have really well, I've been able to buy a virtually new MPV to cart my 3 children round in - great for camping with! (£11,300 - registered Sept '03, automatic, with under 1600 miles on the clock) with a 5-year manufacturer's warrantee, and which will hopefully last us until my youngest is almost grown-up before it has to be towed away and put out of its misery.

And yes, I am managing the repayments OK - £250 a month over the next 3 years - I don't spend money on things we don't need, and don't spend a penny more than I have to on things I feel we do need, by searching round for the best deals.  It takes a certain amount of effort, but saving money has pretty much been a lifelong habit for me anyway.  I feel we have a pretty good standard of living, all things considered.

Not bad, eh? And this is just lil ol' me. I'd imagine that the majority of people visiting these boards are better off than me, (potentially, at least), and so to them the financial benefits of developing a good credit record should be even greater.

/rant  ;)

If you are lucky enough to get a 0% card which does Super Balance Transfers, then you just phone them up and provide details of the account you would like the money transferred to.  You can do this at the same time as activating your new card when it arrives.  The money is usually in your account within 4 or 5 working days.

If you have one card which won't do Super Balance Transfers, (Card A), and one which will, (Card B), you can simply make an ordinary Balance Transfer from card A to card B, then as soon as the money appears in the Card B account, you do a Super Balance Transfer from card B into your current account/savings account or wherever. You have effectively just made a Super BT from both cards into your bank account.

Ordinary BTs are made in exactly the same way as SBTs, but in this case, money is transferred from one card to another, instead of to a bank account.  ie. you can just call them up and say you would like to make a Balance Transfer, and give them the details of the card you want to transfer money to.

i]I'm sure Martin would remind people at this point that it is not advisable to take on additional debt just to put more spending power in your pocket.[/i

Balance and Super Balance Transfers from 0% cards are an excellent way of reducing the amount of interest you pay on existing debt, to stretch your resources to facilitate an essential purchase, or to put cash into your savings account to accrue a bit of extra interest until it's time to give it back. You should not allow them to tempt you into more spending than you would otherwise make, and you should always remember you have to pay it back at the end of the interest free period - or start paying interest at what may well be a very scary rate!

Some banks are now offering an online facility where you can view all your different accounts and credit cards in one place, and displays it all in the form of a simple balance sheet.  Assets are displayed on one side, and all your borrowings on the other, with a figure for 'Your Total Net Worth' displayed at the bottom.

It's a very useful tool, and quite sobering, because the outstanding debts are all there in one place and can't be forgotten. You aren't tempted to think you have more money than you really do, and it is easier to see whether you will have enough to pay off the 0% cards in full when the time comes.

There are too many acronyms and abbreviations AFAIK.
SBT would describe a credit card transfer to a non credit card account such as a current or savings account. I have done this using the digits of my debit card or the sort code and account number which end up being the same account.
J_B.

Yes indeed, that's very clever, is it possible JB ??? ;D

I have not expressed things well. It is my fault.
I answered the question What is an SBT ?
My descriptions of using a 16 digit debit card number or using an equivalent sort code/account number were once the money was in my SBT Egg credit card account.

Also all transactions were in the first month of the anniversary period where balance transfers are free for me. I also get five months 0% free.

Sorry for the confusion.
J_B.