0% credit cards

Carola_H

Hi there 
Just asking if my husband is right in thinking that applying for a 0% credit card affects your credit score ?
And also to check up to what total amount might be accepted on one of these cards ?
And lastly if you don’t manage pay the complete amount off by the time that the offer expires what happens ? Can you swap to another deal or do you end up paying an exorbitant amount/more than you were paying before ?
Bless you for any help that you can offer in the matter - I don’t understand how these deals work as I always pay off in full so I haven’t ever needed to look into them before. 

I’m hoping that I might be able to help my husband out - but obviously I don’t want to make a mistake … 😬 
Many thanks indeed ! 

 

[Deleted User]

Any change to your credit affects your credit score, but no one ever sees it but you. Lenders will only see the search and any subsequent account.

Your limits will depend on your credit worthiness and lender criteria.

Any balance not cleared by the end of the promo will be charged at the standard rate. It will only be exorbitant if you opted for a card with an exorbitant rate, which you'll know before you apply.

Bottom line is that he will save money if he can move an interest bearing balance to 0%.

[Deleted User]

Your credit score is a gimmick, no lender ever sees it, nor is it ever a factor in lending / getting accepted for credit

A few providers will give you a reasonable estimate of your potential credit limit when you apply

If you can get another BT card with sufficient credit then yes you can do another transfer from the first card, subject to fee of course. Any BT though you should always have a 100% guaranteed plan to pay it off in time as there is no guarantee you will get another card. As above, any balance left once the promo period ends is charged interest at full whack.

Balance transfers are very simple - you take out a card with Bank B and they pay Bank A whatever you ask them to pay. Bank A then has an empty balance and no more interest and you have the debt on Bank B which is normally 0% for a fixed period, or a fixed (low) interest rate for the life of the balance. I find it easiest then to simply take the balance, divide it by the number of months at 0% and then set that sum as the monthly direct debit, thus the balance is cleared before any interest is due

Alex9384

Carola_H said:

Hi there 
Just asking if my husband is right in thinking that applying for a 0% credit card affects your credit score ?
And also to check up to what total amount might be accepted on one of these cards ?
And lastly if you don’t manage pay the complete amount off by the time that the offer expires what happens ? Can you swap to another deal or do you end up paying an exorbitant amount/more than you were paying before ?
Bless you for any help that you can offer in the matter - I don’t understand how these deals work as I always pay off in full so I haven’t ever needed to look into them before. 

I’m hoping that I might be able to help my husband out - but obviously I don’t want to make a mistake … 😬 
Many thanks indeed ! 

 

In the UK we don't have a real credit score. Each lender have their own internal scoring system that you will never see and they will never see your "score" that credit reference agencies show you.

But yes, applying for any credit card will leave so-called 'hard search' on your credit files for 12 months. Most providers offer an eligibility check which shows you whether or not you're likely to be accepted. Some checks only say eligible or not eligible, other will show you percentage of how likely you are to get the card. Some will also show you what your credit limit would be if you proceeded to the full application. If you want to see what limits you would get, start with Halifax, Lloyds, MBNA (they are in the same banking group), use their eligibility checks.

And yes, you can swap to another deal at any time (it's called balance transfer), as long as you are eligible for another card, which you should be if you have an income and no bad credit history.

Remember, even on cards with 0% to always pay at least the minimum monthly payment (but preferably more than minimum), otherwise you will trash your credit history and won't be eligible for other cards.

Balance transfer (BT) cards usually charge a fee for transferring balance from your old card. BT deals with longer 0% periods usually have higher fee and deals with shorter periods have lower or even zero fees for transferring the balance. But then again, you still need to pay every single month at least the minimum payment, to avoid missed/late payments.