0% balance transfer cards

Bikeyoda

Good morning,

After some advice in regards to 0% balance transfer cards. Couldn't find any information online.

They come with the following, 0% balance transfer for 6 months. Then says need to do the transfer within 60 days of opening the account.

One the 6 months has passed, is it then a case of clearing or moving the balance to another card and closing that account down.

Then in another 6 months applying with them again. Or do they offer the 0% again after a certain period has lapsed.

Hope that is clear, 

Best wishes 
Jason

CliveOfIndia

Bikeyoda said:

One the 6 months has passed, is it then a case of clearing or moving the balance to another card

Yes - you need to clear the balance when the promotional offer expires, otherwise any remaining balance will start accruing interest at the card's standard APR.  Be aware that it's usually 6 (or however many) months from the date you open the account, not from when you do the transfer.  And check if there's a BT fee to pay as well.

It's not wise to assume you'll be able to get another BT card to transfer the remaining balance to.  You may get offered one, but you can't bank on it.  So you need to have money put aside to clear it if necessary.l

Bikeyoda said:

and closing that account down.

Then in another 6 months applying with them again. Or do they offer the 0% again after a certain period has lapsed.

It's always a toss-up whether to close the account or not.  Some cards might offer you another BT deal if the account is open but unused for a few months, others may try to tempt you back as a "new" customer if you close it down.  But there's no real way of predicting this - it depends on that particular lender's marketing strategy at that point.

DullGreyGuy

Bikeyoda said:

One the 6 months has passed, is it then a case of clearing or moving the balance to another card and closing that account down.

Then in another 6 months applying with them again. Or do they offer the 0% again after a certain period has lapsed.

Depends why you are needing to balance transfer in the first place... if its been stoozling then you compare the fees for doing a BT against the interest rate you are receiving on your savings and decide if its better to transfer or repay. 

If it's because you are in debt then you may not have any option to transfer. 

What you do with the old card is up to you, some banks regularly give offers to existing cardholders whilst they like you but they often arent as good as those being offered to new customers. However as a new customer you arent guaranteed to be accepted or get the limit you want/need. 

There are many posts on here from those who got into debt using 0% cards and not having a plan for repayment and then suddenly find they arent being accepted for any new 0% transfers so are stuck with debt on a 30% interest rate which they "can't afford". Some have kept old cards but they arent offering BT promos because they like new lenders are thinking the person isnt in a good financial position. 

ManyWays

The short 6 month balance transfer terms are typically from bad credit lenders and only used by someone whose credit record is not good enough to get a longer term. If that is you, you may find it very hard to get another 0% deal at the end from another lender and the bad credit lenders dont normally offer another offer because they want you to be paying their high interest.

So unless you are sure you can clear a large amount of the balance within the 6 month term, think twice about taking an offer where the "follow-on" interest rate is higher than the rate you are currently paying.   

Also there are a few lenders who dont allow transfers out, so make sure that you dont get stuck with one of them.

prettyandfluffy

I have taken out balance transfer cards at different times with Virgin Money, Sainsbury's Bank (now unavailable to new applicants) and HSBC.  Once the 0% period has ended, they have all offered further 0% transfers, Virgin Money & Sainsbury's have been the most frequent.  Once the 0% period is over the card reverts to their standard interest rate which will be detailed on your statement as well as in the Ts&Cs.  I pay my cards by direct debit and set the amount so that the debt will repaid within the 0% period, e.g. if it's £1200 over 12 months I would pay it off at £100 a month.  Do be very careful not mix spending and balance transfers on the same card as that can get complicated and end up with you paying interest.