UK credit cards that handle overseas balance transfers?

hiscores

Hello all --

I moved to the UK from Canada in 2007. I have a good job here and earn a decent salary, but despite that, I'm finding it difficult to put much of a dent into my existing Canadian credit cards debt. As it stands now I probably owe about $20k across three cards, and am only really managing to pay off about $1k a month. A lot of this is because I'm getting killed on the interest rates of those cards (they range from 19-25%) and also taking a hit on currency conversion every time I transfer money to Canada.

When HSBC offered me a credit card with 0% balance transfer fee, I jumped at it. My strategy was to transfer a huge part of my Canadian debt over to this card and make better headway on the actual debt part. Unfortunately, despite assuring me otherwise during the application process, it turns out that HSBC's terms for balance transfers were limited to UK cards only. I've complained to the bank to no avail, and now I'm effectively stuck with the same problem.

I got that credit card roughly four months ago, so I'm thinking I'll safely be able to apply for another credit card or loan in about another couple of months. So, I'm wondering if anyone can recommend any UK cards that are currently touting 0% balance transfers which they know definitively will transfer balances from overseas cards.

More generally, I'd love to hear about any personal strategies that people in similar situations have had for eliminating or consolidating this kind of debt.

Thanks in advance.

Moggles_2

Welcome to MSE!

My understanding is that UK credit card providers - including those owned and operated by overseas banks - only accept balance transfers in pounds sterling from UK credit card accounts.

noah271007

I think you are stuck here mate, Moggles are right, there is no provider out in Uk who can offer this facility. Looks like you have to do the hard way mate or return to Canada!! It is normal that balance transfers are only confined to UK credit card accounts in your name. Just like they do in Canada and vice versa. Internationally, they don't exchange data on people's credit histories. This may change in future with the US, Canada, Australia, Spain and UK sharing data as a pilot scheme.

hiscores

In that case, is it fair to conclude that my best option will be to try and take out a cash loan from a UK bank?

noah271007

I guess yes. You will lose money through exchange rate, but yes bank loan is probably the best solution. Family/friends you left behind in Canada, can they help you out by giving you a loan and you pay them back over time??

YorkshireBoy

MBNA (including branded cards such as Virgin), Egg, Post Office, and M&S will all allow you to pay cash at 0% into your current account, from where you can reduce/settle the Canadian cards' debt.

Fees range from 1% (on M&S via Sterling travellers cheques) to 4% (via MBNA's 'money transfer') and duration runs from 6 months to 16 months.

After the introductory period(s) any debt remaining can be balance transferred to other cards.

Yes you'll pay a fee, and yes you'll incur foreign exchange fees, but these should still equate to a good bit less than the 19-25% APR the Canadian debt is costing.

hiscores

So, to be clear, I could potentially sign up for one of these cards, transfer 90% of the limit as a cash payment with no associated fees to my current account, and then transfer that to Canada to pay?

Is there a term for this feature? I've been looking at M&S and Virgin's cards but I assume this is a special manouevre that's not covered off by statements like "0% on shopping for the first six months"? What exactly would this type of payment be called? Sorry to be so specific, but I just want to make sure I'm asking for the right thing as and when I decide to apply.

hiscores

Also, just to be sure, are you saying I could take out M&S travelers cheques at 1% on the M&S card, immediately pay them back into my current account, and that there wouldn't be anything illegal or dodgy about that? Last thing I want to do is sound the credit agency alarm bells here..

Moggles_2

hiscores wrote: »

So, to be clear, I could potentially sign up for one of these cards, transfer 90% of the limit as a cash payment with no associated fees to my current account and then transfer that to Canada to pay? Is there a term for this feature? I assume this is a special manouevre that's not covered by statements like "0% on shopping for the first six months"?

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. A handling fee applies (typically 3-4% of the sum shifted), but there are no other charges during the introductory promotion (usually 12-13 months). You would need:

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

To maximise the 0% period, 16 months is currently available to new customers from Virgin. There's a 4% handling charge.

http://uk.virginmoney.com/virgin/credit-cards-v3/

Moggles_2

What exactly would this type of payment be called? Sorry to be so specific, but I just want to make sure I'm asking for the right thing as and when I decide to apply.

IMO, it's best to request your money transfer from Virgin by phone (as opposed to online), so you can make certain the 0% interest rate will apply. You can do this when you call to activate your card. There's a dedicated, Freefone number.

Virgin allows you to borrow up to 95% of your credit limit. The money arrives in your bank account in about 6 days

YorkshireBoy

hiscores wrote: »

Also, just to be sure, are you saying I could take out M&S travelers cheques at 1% on the M&S card, immediately pay them back into my current account, and that there wouldn't be anything illegal or dodgy about that? Last thing I want to do is sound the credit agency alarm bells here..

I've had just under £10K...twice...for a total of 22 months, and I'm about to go for a 3rd (10 month) bite at this cherry.