This is a guest post
Most of us are being more careful than ever with our money and with continued concern about the international economy and the UK housing market it seems that this is unlikely to change any time soon. If this sounds like you, then there’s every chance you may want to get better control of your existing debts – which is where a balance transfer credit card can come in handy.
However, while many of us will have heard them mentioned, there will be plenty of people who are still wondering what they are and how they might help with their financial reorganisation plans. Here is a quick guide to balance transfers and how they can prove useful to those looking to get savvy with their money.
What is a balance transfer?
If you owe money elsewhere, say for example on usually expensive store cards or older credit card accounts, there is a chance you are paying more in interest than you need to be. If you can find a credit card that offers you a better deal, you’ll probably want to move all of these existing amounts over and take advantage of the more competitive rate, which is known as a balance transfer. Balance transfer credit cards will usually allow you to do this with a 0 per cent rate of interest, though there may be other fees that apply. You may also need to check the duration of this offer if you want to make sure you can make the most of it.
How do I go about setting this up?
Well, the first thing you should do is get down on paper all of your outgoings and what you are repaying in interest each month. Then you need to head to the web, where you’ll be able to compare credit cards that offer 0 per cent balance transfers and make an application. If you are successful, you’ll be able to start moving these balances over pretty much straight away – either over the phone or by using your online account. MBNA is one company that allows you to do all of this online, but as all providers will be different, fees, introductory periods and other details are things to look out for.
What else do I need to know?
Like any financial product, you’ll be bound to certain terms and conditions. While the amount you can transfer will vary depending on what you owe, it’s a good idea to set up an agreed credit limit as soon as possible and stick to it so you don’t simply incur more debt. Some banks will charge annual fees as well as fees for the transfer, so do your homework in advance to make sure this isn’t going to be too costly.
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