Clear your credit card balance quickly and enjoy a fee free transfer : Credit Card Guide

Clear your credit card balance quickly and enjoy a fee free transfer

Customers that want to transfer high interest credit card balances onto a 0% balance transfer card could benefit from paying no transfer fee if they are able to repay the balance within six months. Qualifying customers that are able to meet the six month timescale could enjoy interest free credit on their transferred balance and save themselves the cost of paying the 2-3% standard transfer fee with the platinum 0% balance transfer credit card that has been launched by Capital One.

Most balance transfer credit cards charge a 2-3% transfer fee based on the amount being transferred in total, but many offer long 0% periods with some offering up to fifteen months. However, the Capital One card offers just six months of interest free credit on balance transfers, but for those who can repay the balance within this time this card could prove very effective because there is no transfer fee to pay.

Consumers that want to take advantage of the Capital One offer will need to meet the eligibility requirements, and this means having a good credit history, which is required for most balance transfer cards.

One industry official stated: 'Balance transfer fees have increased with many being uncapped, lenders have tightened up their credit scoring criteria, so you need almost spotless credit history to get your hands on one of these deals. If you do, the interest free limits will be smaller than they used to be.'

After the initial six month interest free period any remaining balance will be charged at the lender's standard variable rate. Consumers need to weigh up whether they can repay the balance within the six months, or if not whether it will be more cost effective to pay the transfer fee and transfer to a card that offers a longer interest free period.

Tom Smith
12th March 2008

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