What are 0 Balance Transfers?
0% balance transfer credit cards charge no interest for a certain period of time after sign-up. This means that if you have balances on your current store or credit cards, you can transfer them onto a 0% balance transfer card, and pay 0% interest on the transferred balance.
Introductory offers will vary depending on the credit card provider, so you may find a 0% balance transfer card with an introductory period lasting three months, or if you are lucky, you may find an offer that lasts over 12 months.
0% balance transfer cards are designed to help you pay off more of your credit card debt, while giving you a break from paying interest. At the end of the introductory period, any unpaid debt will revert to either the purchase rate or the cash advance rate, as determined by the credit card provider.
Choosing the Best 0 Balance Transfer Card
Choosing the best 0% balance transfer card usually comes down to finding a card with a long-running introductory period. While some 0% balance transfer cards have introductory periods that last just a few months, there are other offers that last up to a year, and sometimes longer.
Before you start looking for a 0% balance transfer card, you will need to think about how long it will take to pay off your outstanding balances. If you think you can pay off the debt quickly, then you can choose a credit card with a shorter introductory offer. If you need longer to pay off your debt, try to find a card that has a longer offer.
The next thing to think about is your credit limit. You will need to find a balance transfer card that accommodates the amount you need to transfer. If this is not possible, transfer as much of your credit card debt as possible, to take advantage of the lower interest rates.
If you plan on keeping the 0% balance transfer card after the introductory period, then you will need to assess the card for its suitability to your needs. Make sure the card is suitable in the long term, and find out how much is charged on purchase rates and annual fees.
Avoid the biggest mistakes
The biggest mistake you can make with a 0% balance transfer credit card is not paying off your debts before the introductory period ends. As the unpaid debt usually reverts to a much higher rate, you can end up paying out a lot in interest.
While it’s not always possible to pay off your transferred balance before the balance transfer offer ends, you should make it your top priority to pay off as much as possible to take advantage of the lower interest rates.
Before you apply for the card, find out exactly when the offer will end, and what will happen when it does. Find out the reversion rate, and how much you will pay in annual fees. Read the terms and conditions in full to make sure there are no catches to the offer.
After the account has been opened, set yourself reminders at regular intervals so you know how long you have left before the offer ends. This can work as an incentive to motivate you to pay off as much as possible each month. You should be able to keep track of your progress via online banking, or by reading your credit card statement.