Newbie to credit cards, any good 0% deals at the moment?

alistairolsen

Hi,

I've never had a credit card and never wanted one until now, but buying online and a number of horror stories have convinced me I need one, if only as a safe method for transferring funds (paid off in full every month)

The right card could also help me out clearing some debt. I currently have about £900 of debt in an HBOS account. They don’t charge interest, but do charge £30 a month for any amount below zero, which obviously works out at 40% interest over the course of a year and will only rise in percentage terms as I pay off the debt!

Is there a card offer available which would allow me to transfer this debt and pay it off over a number of months (6, 9, 12 whatever) with 0% interest, or at least a lower rate than I’m currently paying. Id like to clear it asap, but don’t have the funds to pay it off in one go and for every month that I stick money in I’m losing a good chunk of it!

I might be hoping for the impossible but I thought this would be the place to ask!


Also, as this is a debt in a bank account, I assume it doesnt count for balance transfer only deals? Id need 0% on payments too?


Cheers


Alistair

Tixy

To move a debt from your overdraft to a credit card you need a card that allows super balance transfers also called money transfers. Only certain cards do these, and they do incur a transfer fee, though a lot do have 0% apr promo periods.
List of cards that allow this is here http://www.stoozing.com/sbt.php

However these cards are not the easiest to be approved for. If you've never had a card before, and if you are using your overdraft all the time this is likely to count against you. Whether you would get one would depend on what other credit history you have as well as you financial positions, income etc.

alistairolsen

Ive had a mortgage for 5 years?

I didnt think it would be as simple as a credit card and a trip to a cash machine :P

cheers for the advice, will have a look at the list. Am I better to apply to just one? I believe the credit checks show up and too many count against you? So applying for lots all at once is a bad plan?

Cheers

Tixy

Yep, apply for one and see how you get on, having the mortgage should certainly help (well assuming its always been paid on time of course!).
If you are accepted then great, if you are turned down then don't apply for lots more, as you say a lot of credit searches close together doesn't look good.

Just a quick warning (seeing as you've said you are new to credit cards) do make sure that your minimum payment is always paid in plenty of time before the due date. If you are not paying by DD then make sure you allow 5working days for the payment to be credited to your account. I know it sounds obvious but there are lots of posts on this board where people have paid too late and are then annoyed to find they have lost their 0% deal.

alistairolsen

Ah ok, thanks very much for the warning. Yeah its always been payed on time so should help, hopefully!

alistairolsen

Ok, to be sure Ive got this:

MBNA Platinum Visa2.88%open1.00%1616.7% ** Money transfer (SBT) fee is now 4% **

The fee of 2.88% is a percentage of the total I transfer which I will be charged for transferring the debt to the card?

The "open" limit means I can transfer any amount, presumerably up to whatever the total limit of the card is?

What is the "min pay" of 1%?

0% - 16 I assume is 16 months at 0%?

16.7%APR is self explanatory

A lot fo the cards on that list seem to have gone to 4% fee across the board since the original columns were written, some change in the market?

Cheers

stephane_2

If you've never had a credit card before....then you'll never get a MBNA one

Tixy

alistairolsen wrote: »

Ok, to be sure Ive got this:

MBNA Platinum Visa2.88%open1.00%1616.7% ** Money transfer (SBT) fee is now 4% **

The fee of 2.88% is a percentage of the total I transfer which I will be charged for transferring the debt to the card? to do a transfer to pay off an overdraft you would need to look at the SBT fee - so it would be 4% in the above example - 2.88% would be to move from one card to another.

The "open" limit means I can transfer any amount, presumerably up to whatever the total limit of the card is? Not totally sure, I think it means there is no maximum credit limit on the card (but what you would get will depend on their assessment of your circumstances). Usually you can transfer either 90% or 95% as a maximum balance on most cards.

What is the "min pay" of 1%? minimum monthly payment is 1% of your balance

0% - 16 I assume is 16 months at 0%? yes

16.7%APR is self explanatory

A lot fo the cards on that list seem to have gone to 4% fee across the board since the original columns were written, some change in the market?

Cheers

People were using these SBT cards for stoozing (borrow the cash from the card and put in a high interest account, earning more than the cost of borrowing) so to dissuade people from doing this the card companies started charging more to do a transfer to your current account than to another card. So 4% to pay off an overdraft (or pay into a current account) but still only 2.88% to pay off another card.

alistairolsen

stephane wrote: »

If you've never had a credit card before....then you'll never get a MBNA one

Which card would you recommend I try applying for then?

Tixy, thanks again for the advice!

YorkshireBoy

alistairolsen wrote: »

The "open" limit means I can transfer any amount, presumerably up to whatever the total limit of the card is?

The card information you quoted is from the stoozing site's tables.

The column you refer to was where they displayed any BT fee cap* applicable. The 'Open' wording simply means there's no cap on the BT fee, ie it's open ended.


* eg the Virgin Atlantic card used to have a £50 cap on the BT fee.

alistairolsen

No one? I assume the more mainstream cards are generally easier to get? Egg and suchlike?

Cheers