Money News
| Typical APR Variable | Max Int Free | ||
|---|---|---|---|
|
14.9% | 56 days |  |
|
|
14.9% | 56 days | |
|
14.9% | 56 days | |
|
14.9% | 56 days | |
|
15.9% | 56 days | |
| * Based on Lowest Standard Rates and is not a full search of the whole market | |||
The market for transferring your debt from one credit card provider to another - better known as a balance transfer - has undergone significant change over the past few years.
Meanwhile, the length of balance transfer deals has tended to increase. Two years ago cards offering 0% for 12 months were top of the best buy tables, with the majority trying to tempt us with 0% for 9 months. Now the top card offers 0% for 15 months, with many other best buys offering 13 months interest free.
Superficially, this increase in the length of balance transfer offer appears good news for financially stretched consumers; but the reality is somewhat different than a few years ago - not least in that it costs increasingly more to switch your debt from one provider to another. And many of these fees are uncapped. Moreover, lenders have tightened up their credit scoring criteria, so you need an almost spotless credit history to get your hands on one of these deals. If you do, the interest free limits will be far smaller than they used to be.
Capital One Bank bucked the trend recently when it launched a credit card offering balance transfers without a balance transfer fee. But as with everything, there is a downside: the card offers 0% until August 1st 2008, meaning that the length of the 0% term is 9 months less than the market leading card from Virgin Money. That said, the lack of fee will make this a good option for anyone who can afford to repay the debt over the short term of 6 months.
As Samantha Owens of search engine Moneyfacts makes the point, lenders recoup their costs and start to make their money once the card reverts to the standard purchase rate after the introductory balance transfer term has ended, so you need to be aware of the revert to interest rate, as some of these can really hit your wallet hard.
15 July 2008 © Moneyextra.com
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