How to SBT with Abbey credit card?

mrsw

Please can someone explain how you request a SBT on the application form? I can only see an option to BT from other credit cards, which doesn't interest me. I have entered my bank account details, but it doesn't ask if I want to transfer money into there.

Clariman

mrsw wrote:

Please can someone explain how you request a SBT on the application form? I can only see an option to BT from other credit cards, which doesn't interest me. I have entered my bank account details, but it doesn't ask if I want to transfer money into there.

An SBT is a term that Martin Lewis coined (I believe) and has now been more widely accepted by people who are stoozers or rate-tarts. It is not a general industry term that then lenders use. An SBT is just a Balance Transfer but one that allows you to transfer a negative balance from a bank account into a credit card. Of course, you don't necessarily need to have a negative balance.

If you look at the SBT articles on this website you should be able to work it out. Alternatively you can look at the "Full Guide" at the website below (under the Stoozing menu option). Although Stoozing is about making money from credit cards, the diagrams with SBT cards will probably help you.

Clariman

mrsw

Thank you. I have read all Martin's articles. What I really want to know is how I request the transfer on an application. I believe you must do it at the time of application to avoid any BT fees.

I want to use it transfer money to my bank account. Not sure what you mean by a negative transfer from a bank account on a card?

jimclark1967

mrsw wrote:

Thank you. I have read all Martin's articles. What I really want to know is how I request the transfer on an application. I believe you must do it at the time of application to avoid any BT fees.

I want to use it transfer money to my bank account. Not sure what you mean by a negative transfer from a bank account on a card?

The reason some credit cards allow you to transfer to your bank account is that you might be overdrawn on your bank account (negative balance) and want to transfer this "debt" on to the credit card at a lower interest rate. You don't actually need to be overdrawn though as it's just a case of transferring the money across.

Only a few credit cards allow you to transfer to a bank account, Egg and Virgin are two of them, I'm not sure if the Abbey credit card has this feature?

JC

Clariman

mrsw wrote:

Thank you. I have read all Martin's articles. What I really want to know is how I request the transfer on an application. I believe you must do it at the time of application to avoid any BT fees.

I want to use it transfer money to my bank account. Not sure what you mean by a negative transfer from a bank account on a card?

OK - let me try to explain. When credit card companies talk about doing a balance transfer, they mean that you are transferring a debt from one card (or bank account) to their card. So if you have an old credit card with £4000 on and want to transfer that debt to your new card, you ask your new card's issuer to do a Balance Transfer of £4000 from the old card to the new one. Let's think about the mechanics a bit further. How do they transfer a debt over ? Well, what they do is send money from your new credit card to pay off the old one. So ... the money flows from your new credit card to the old one but it is described as a balance transfer from the old one to the new one because you are transferring the debt from old to new.

Now, let's move on to bank accounts. SBT cards are primarily there to enable you to transfer a bank account overdraft (debt) to your new credit card. The principle is exactly the same as with doing a BT from another credit card. You request your new card issuer to do a balance transfer from bank account to the new card. This makes sense when you have an overdraft because you are transferring the debt (what I call 'negative balance') in your bank account to the credit card. So the money flows from your new credit card to your bank account in order to pay off your overdraft debt. OK ?

Where it gets a little confusing is that you can use the SBT card to pay money into your bank account even if you don't have an overdraft. But to make this happen, you still need to do it as a balance transfer from your bank account to your new credit card. Where it gets confusing is that you may not actually have an overdraft in your bank account so it is not really transferring a debt balance at all. Even if that is the case, your new credit card issuer will still call it a BT from your bank account to your credit card.

The key thing to remember with BTs and SBTs is this. Ask yourself which direction you want the money to flow ? Once you have got that sorted out in your mind, you then need to remember that what you actually request is a Balance Transfer in the opposite direction to which the money flows.

So, if you are wanting to pay money from your new credit card into your bank, then you request it as a Balance Transfer from your bank account to your new credit card.

Hope that long winded explanation helps.

Clariman

mrsw

Clairman - thank you. That all makes sense now!