Loan v Balance Transfer

seantommo

Hi
May be a stupid question, but advice I have seen is to use balance transfers rather than loans to repay debt.
I have range of overdrafts I want to consolidate - can I use a balance transfer process to achieve this - or do I need to have all debt on a card to transfer it
Thanks for your help

Tixy

There are some cards that allow you to clear an overdraft. The cards that allow these 'super balance' transfers to your current account are listed here - http://www.stoozing.com/sbt.php
The transfer fees are usually higher than normal transfers (around 4%) so you need to cost out if it will work out cheaper than a loan (depending on how much you want to transfer and how quickly you can afford to repay the debt). If the debt isn't cleared by the end of the 0% period then the interest rate will jump up and could end up costing you more in the long run.

To get any of those cards on the list you will likely need a near perfect credit record. And depending on the level of your overdrafts it will also be subject to how high a credit limit you be given on any new credit card.

seantommo

Thanks Tixy , very useful info

redpete

and if you do manage to get one of these CC accounts that you can transfer balabces from a bank account...

What will happen when the CC low interest period ends? Will you have your finances sorted so you don't still have the same debt? If not what would you do if you can't find another CC offer to replace it and the banks have taken away your overdraft facility?

Neither a balance transfer nor a loan is a solution to debt, at best they give temporary respite to allow you time to get sorted out, at worst they leave you with more debt.