Capitalise on balance transfer credit card deals

BBalance transfer credit cards are stacked in consumers' favour


Balance transfer cardsA number of Britons are looking to maximise the value they can receive from their credit cards in the current economic climate. In a large proportion of these instances, 0% balance transfer credit cards will be the main focus of their attentions. The process of securing a new card can seem daunting, with approximately 150 deals of this type on the market at present. However, David Black, a banking specialist from Defaqto, has suggested that finding the most competitive rates is straightforward if certain procedures are followed.

Finding a cheaper credit card
In an interview with the BBC, Mr Black explained that the average 0% credit card deal now lasts for 9.7 months, with a typical 2.83% fee applied to each balance transfer. With this in mind, he advised Britons to use Barclaycard's 'pre-application' tool in order to see which deals they are eligible for with the credit card provider. Furthermore, he noted that this gives a "significant pointer" as to an individual's chances of getting similar balance transfer deals from other companies.

Mr Black noted that consumers should thoroughly check their credit files with reference agencies such as Callcredit, Equifax or Experian to ensure that they do not contain any inaccuracies. In addition, he explained that credit card providers will treat applicants more favourably if they are on the electoral roll and have filled in their application forms as fully as possible.

Closing other credit cards
Another prudent strategy before applying for a 0% credit card is to close any other cards that are not being used. Mr Black noted that there are two reasons for this course of action, which are both underpinned by providers' fear of "customer over-indebtedness".

"Firstly, when a prospective new card provider looks at your credit file it will increase the credit 'headroom' available to you," he told the news provider.

"Secondly, once you have closed the card, after a gap of about nine months you will generally be treated as being a new applicant, with that card provider giving you access to introductory offers again."

Customers have the power
Earlier this month, a report by the Daily Mail indicated that seven cards now offer interest-free balance transfers for at least 15 months, compared to one at the same point in 2009. Indeed, Mr Black noted that consumers should ensure they take the time to pick the best 0% credit card deal as the market is currently "heavily stacked" in their favour. Those with good credit ratings should use the various tools available them, such as websites and best-buy newspaper tables, to compare credit cards in order to find the most suitable offer. As a final note of caution, the expert urged Britons to remember that not all credit card providers will permit them to transfer the entire outstanding balance they have earmarked for their new 0% deal.

Published: 4 March 2010