Many applicants denied best balance transfer deals

By Marianne Curphey

A balance transfer can be a good way to consolidate high-interest debt from one or more credit cards onto a card with lower interest. Many balance transfer cards now offer 0% interest for months -- up to 30 months, in some cases. But a significant number of applicants are not getting the deal they hoped for.

A study by independent market research firm Consumer Intelligence found that 10% of customers -- more than 1.12 million people -- who applied for 0% balance transfers in the past two years got a shorter introductory period than they expected. Of those with successful applications, 11% were not allowed to transfer the full amount they requested. denied-balance-transfer-period

It's not a case of false advertising, though. Although card firms are legally obliged to offer their advertised headline rate to at least half of all successful applicants, they don't have to extend the full deal to everyone who applies. In fact, many credit card companies advertise a range of 0% balance-transfer periods, not just one.

"The best deals are only available to those with good credit histories, and people may not receive precisely what they are applying for," said David Black, of Consumer Intelligence, in a statment. "You need to go in with your eyes open. You may not be able to transfer as much as you want to."

Adam Treslove, spokesman for Tesco Bank, agrees. Tesco Bank recently extended the 0% balance-transfer period on its Clubcard credit card. Treslove says 29 months is the headline rate for the card, not the guaranteed rate for all applicants.

In general, the "balance transfer war" going on is good news for consumers, Black says. Banks are vying to keep up with the competition and, as a result, 0% balance transfer periods are getting longer and fees are going down.

To qualify for the best balance transfer deals, work on your credit score. Pay any loans -- including credit cards, personal loans and mortgages -- on time. Also, make sure all your personal information is correct and up to date on your credit record, and that your correct information is on the electoral roll.

See related: Fact or myth? Test your credit rating knowledge, What does "APR" really mean?

Published: 14 January 2014