If you're applying for a balance transfer credit card, make sure you follow these top tips.
If you’re applying for a balance transfer credit card, make sure you follow these top tips.
In today’s video I’m going to run through three top tips for a successful balance transfer.
1. Be brand aware
If you’re looking for a new 0% balance transfer credit card, you’ll find you can’t transfer debts between cards issued by the same company.
For example, if you have the MBNA Platinum Dual credit card, you won’t be able to transfer your debts to the Virgin Money Credit card because both cards are issued by MBNA.
So it’s important to make sure you check which cards belong to which providers before making your application.
2. Watch out for negative order of payment
Negative order of payment is a nasty trick used by the majority of credit cards.
In a nutshell, it means that any payments you make on your credit card will go towards your cheapest debt first, while the most expensive debt will be paid off last.
To avoid being caught out by this, make sure you don’t use your balance transfer credit card for purchases.
If you do want to spend on your credit card, you should apply for a separate card for balance transfers and a separate one for spending. Alternatively, apply for a credit card which offers an equal 0% period for balance transfers and purchases.
3. Make your payments on time
Once you've successfully got your hands on a 0% balance transfer credit card, make sure you remember to make your monthly payment.
If you forget, or you’re late, your card provider usually has the right to cancel your 0% deal there and then. And that means you could be hit with an interest rate of around sixteen percent. Missing payments could also have a negative impact on your credit record.
A good way to remember to pay on time is to set up a direct debit to automatically make a payment each month.
Finally, don’t forget you can compare a wide range of credit cards here at lovemoney.com