Balance Transfer = Good idea?

Tomarse_2

Morning, actually afternoon folks,

Not long ago, I found that my credit rating was actually quite good and that it was simply the fact I wasn't electorally registered that was going against me. Aaaanyway, this means that I'm kind of a newbie to the world of credit.

I applied for a credit card simply to cover the cost of some rather pricey dentistry to the sum of £300. Card eventually turned up the day after I paid the full amount on my current account. My final graduate loan payment also just came out and they took an additional £150 straight from my account to clear some remainder I wasn't expecting (that's another issue).

My card (Halifax) is offering 0% interest on balance transfers for 10 months. I think I'll still get a 3% transfer fee which to clear my overdraft (on a Barclays account - does this make a difference?) would be £24. Doing this would save me the overdraft interest plus mean I could ditch the £15 account upgrade.

Is this a good idea? I can't see any problems with it and I do intend to pay off the credit card before the 10 months is up.

Sorry for the long winded waffling. :rotfl:

NickX

Tomarse wrote: »

My card (Halifax) is offering 0% interest on balance transfers for 10 months. I think I'll still get a 3% transfer fee which to clear my overdraft

Unfortunately Halifax does not allow Balance Transfers to a Bank Account to settle an overdraft.

To do this you will need a card with SBT (Super Balance Transfer) capability.

Only a few rather special cards allow this, including Egg, Egg Money, Post Office Card and any card adminstered by MBNA (including the Virgin range).

In addition MINT periodically issue Credit Card Cheques that can be paid into a Bank Account at Balance Transfer rates. However this is the least satisfactory option because the cheques cannot be ordered and unless you already have them, you never know when they are going to drop through the letterbox.

Moggles_2

A few rather special cards will allow you to transfer an overdraft to them, (in other words, transfer cash from the credit card to your current account), at balance transfer rates. Unfortunately, Halifax is not one of them. To do this, you need:

a card issued by MBNA (e.g. Alliance & Leicester, MBNA itself, Sony, Virgin), Egg card or the Post Office card

alternatively, you can use Egg Money (not to be confused with the Egg card) in conjunction with any 0% or low-rate balance transfer card, such as Halifax

Mint periodically issues credit card cheques, which can be paid directly into your current account. Unless you already have them, this is the least satisfactory option, as Mint cheques cannot be ordered and you never know when the next ones will turn up in the post.
Note: other lenders (eg. Halifax) issue credit card cheques from time to time. These can be used to settle bills, but if you paid one into your bank account, you'd be charged for a cash withdrawal - not recommended, not unless you have money to burn :eek:

Moggles_2

Beat me to it Nick!

Tomarse_2

Huge thanks for the advice folks.

With my overdraft being relatively small, would it perhaps be a better idea then to use my credit card instead of my debit card for a couple of months (shopping, bills etc) and let my current account accumulate out of the red (wages go into this one)?

NickX

Tomarse wrote: »

With my overdraft being relatively small, would it perhaps be a better idea then to use my credit card instead of my debit card for a couple of months (shopping, bills etc) and let my current account accumulate out of the red (wages go into this one)?

Have you got 0% Purchases on your card aswell ? If you have then this is a very good idea.

If not, then be careful because you could end up paying more interest on the Credit Card than you are paying on your overdraft.

However, even if you do not have a promotion, if you time your purchases carefully (i.e. on or just after the statement date) you can still benefit from an interest free period of up to 56 days provided you settle the balance in full.

Moggles_2

Tomarse wrote: »

With my overdraft being relatively small, would it perhaps be a better idea then to use my credit card instead of my debit card for a couple of months (shopping, bills etc) and let my current account accumulate out of the red (wages go into this one)?

That would be the easiest way, certainly. That said, Egg Money is a very useful card to have. It's your choice really.

Tomarse_2

Nick, yep, got 0% on purchases for 10 months. The intention would be to use the £150 a month I'm now saving from completing my graduate loan to pay off the card before the time is up.

Moggles, I will have a look at the Egg Money too. I can't see it would do any harm. Though would the fact that I've only just got the Halifax card go against me at all? :cool: