Balance Transfer Basic Question

Hi,

I've just got my first credit card so I'm new to this and have a basic question. What exactly is a balance transfer? And why is it a good thing?

I can see the reason for it if you are paying a high rate of interest on an existing cc and want to do a balance transfer to a cheaper one. Say, if you're stoozing though, so you're still within your 0% period but you reach your credit limit, could you do a balance transfer to a new 0% card so that you can carry on borrowing at 0%. Or would it be easier just to a apply for a new 0% cc?

When people talking about a stoozing "pot", does that mean, you have a credit limit with your existing cc and then if you do a balance transfer, your credit limit of your old card gets added to the credit limit on the new card? So you can borrow twice as much?

As I say, I'm new to this and i'm interested to learn so would appreciate any help.

Comments

  • Tixy
    Tixy Posts: 31,455 Forumite
    Does your new card have 0% on purchases or 0% on balance transfers? or both?

    A stoozing pot is generally the amount of money you have sat in savings and that you also have across credit cards at 0%.

    People generally look to do a balance transfer to new credit cards when the 0% promo period runs out on their existing cards.

    Usually you want to minimise the amount of balance transfers you do because there are (almost always) fees on every transfer.
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