Transferring your credit card balances

Many people in the UK now have two or more credit cards, and often they find themselves being charges high levels of interest on these cards, which means that the monthly repayment on each card can be very high.

Those that repay their balance in full each month do not have to worry about interest, as their balance is settled within the interest free period on the credit card. However, for those that spread the repayments on their credit card balances interest charges can prove to be a real problem, adding a small fortune to the amount that you repay to the credit card company.

This is where a balance transfer credit card can prove invaluable. There are two types of balance transfer cards available on the market these days and these are:

0% balance transfer credit cards

These cards offer an interest free period, which can vary from one card issuer to another. By transferring the balance from your high interest credit cards onto your 0% balance transfer credit card you can enjoy a period of interest free credit during which you should try and clear the total balance on the card.

With these cards you are usually charged a transfer fee, which is around 2-3% of the total amount being transferred onto the card, often with minimum and maximum limits. If, by the end of the 0% period, you still have a balance on the card you will be charged the lender's standard variable rate on the outstanding balance.

Life of balance transfer cards:

These credit cards offer a little more flexibility in terms of paying off the balance, but they do not offer interest free credit. With this type of balance transfer card you can enjoy a very low rate of interest for the life of the balance transferred, which is ideal for those that do not think that they can repay their transferred balance quickly enough to benefit from a 0% balance transfer card.

These cards also do not charge a transfer fee, so you will save money on transferring your balance. You will still need to ensure that you make at least the minimum repayment each month, but you can enjoy the confidence that you will never be charged the lender's higher standard variable rate on your transferred balance.

Actually transferring your balances off your costly existing credit cards to a balance transfer card is very simple.

The easiest way to do this is to provide your balance transfer card issuer with the details of your existing credit card accounts, and the rest will be done for you. This is something that you can do quickly and easily online or by phone. You will have a certain period of time within which to transfer your balance after you have opened your balance transfer account, and you need to ensure that you act within that time when transferring your balances.

Once your balances have been transferred from your existing high interest credit cards to your 0% balance transfer card or life of balance transfer card you should then focus on clearing your credit card debt as quickly as possible either to ensure that you clear it within the interest free period with a 0% card or to minimize on the amount of interest that you pay with a life of balance transfer card.

You should also remember that unless otherwise specified purchases made on these cards are not interest free, so you should avoid making purchases on them. In addition to being charged interest any repayments that you make will usually be logged against the interest free or low interest balance, leaving your higher interest balance to carry on accruing interest.

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