[davyk31]

I know everyone says it but this post really isn't about me!

Basically I'm keen to find out what level of balances can be transferred onto a 0% interest card, how long the period generally lasts for and if limits are low is someone likely to be able to get several cards by transferring balances to several offering 0%.

I reckon someone I'm talking to is exagerating how bad his debts are but wanted a bit of background info.
Anyone any knowledge or experience??

[dakhu1]

First off, there is generally a 2.5 to 3% handling fee on balance transfers - I have never seen one where they charge nothing.

In terms of 0% period, they normally run anywhere between 6 months to 2 years.

If you apply for loads of cards in one go, you are likely to start damaging your credit rating, I think 4 spread out applications for credit (incl. loans/mortgage/credita cards etc) per year are considered safe.

Considerations are length of 0%, likely credit limit, repayment per month (usually a couple of %) and handling fee.

Best bet is moneysavingexpert.com - the best deals can usually be found here

Hope this helps.

P.S - it can be a slippery slope, so advise your mate to ensure he can (a) make the monthly repayment and (b) settle the whole balance when due, otherwise he will have to get another balance transfer in the future, pay the handling fee again and the cycle repeats

[WilliamS]

Originally Posted by dakhu1

P.S - it can be a slippery slope, so advise your mate to ensure he can (a) make the monthly repayment and (b) settle the whole balance when due, otherwise he will have to get another balance transfer in the future, pay the handling fee again and the cycle repeats

Very true advice, in my young years this got me tangled up.

[davyk31]

Cheers for the answer, is the amount someone is allowed to transfer likely to be 1 or 2 thousand or can it go to 15-20k?

[Rudz]

checkout Barclay's platinum, they've got the best rates going at the moment, 0% balance transfer, 1.5% transfer fee, the amount you could transfer I suppose depends on the amount of debt you've already got, this information they'll get when they run a credit check, I could transfer £9k, it could be different for you

[Vaheed1]

Credit cards are probably the worst way of getting out of debt, IMO. Even though you get a 0% interest offer, I just think it hinders progress for many people in paying debt off. They make minimum payments until the 0% offer is up and are then back to square 1.

Going off track, slightly, it's a bit a honey trap for people strapped for cash. A bit like these catalogue companies that offer low income families the chance of buying hundreds of pounds worth of gear for £3.00 a week. A young mother that works for me part-time is in to all these. She has every mod-con going and her house is blinged out to the max - yet she has debt collectors knocking on her door every week. I'm not sure which is worse - The morality of the people lending or the stupidity of the people borrowing.

[davyk31]

Totally agree with all the thoughts, having huge balances on zero percent transfers and only paying the minimum demanded is a fools game, the debts never go away. The only way is to adjust lifestyle to be able to clear off the debts, if that means a second job or doing without some thing then that's what has to happen.

[xs2man]

Meh,

On the other hand, its the cheapest way into a nearly new motor. I currently have £9k on 0% BT. Minimum monthly is around £80-90. I pay £200-300. When the term is up, I will switch it to another 0% card. In the meantime, I pay 0% over 2 years, and then a 3% fee to transfer the balance,

If you can mange it properly, its by far the cheapest way to buy a newer motor. If you cant, then look elsewhere.

Even at £9k, paying the minimum payments about £100-£150 a month, which is paying off the balance, and no interest, so still a worthwhile endeavour, so lang as you can afford to pay it off at any time.

[dakhu1]

In my experience this has always worked for me - but, I am good at managing my finances (and should be as a Chartered Accountant). Used correctly, they are a very cheap source of finance - I have never taken a loan and am a firm believer in managing my finances in a way to incur zero or v.low interest rates, especially as we get sod-all for our savings with such a low base rate.

These generally are best used as a source of funding when cashflow TIMING is an issue i.e. where you will have accumulated the amounts needed to fund the final payment - if not, then as others have said, you just defer the problem and never get out of debt.

These days i am more of a fan of 0% purchase cards, which is literally borrowing at zero cost, and in fact, if you consider inflation and the time value of money (apologies for the jargon), you save money - again this method requires the same principles as mentioned before.

In terms of amount of credit, this varies massively from provider to provider and credit rating but can go in to the £10k + if credit score is good.

[dar2008]

Originally Posted by dakhu1

These days i am more of a fan of 0% purchase cards, which is literally borrowing at zero cost, and in fact, if you consider inflation and the time value of money (apologies for the jargon), you save money - again this method requires the same principles as mentioned before.

Me too. I currently use a 0% purchase card with 15months of 0%. I pay the minimum payment each month off the card, but put aside the total balance outstanding in a 4% savings account (Lloyds Classic with Vantage). Tesco's are lending me the money at 0% and I'm earning 4% interest on it (before tax)

[dakhu1]

Originally Posted by dar2008

Me too. I currently use a 0% purchase card with 15months of 0%. I pay the minimum payment each month off the card, but put aside the total balance outstanding in a 4% savings account (Lloyds Classic with Vantage). Tesco's are lending me the money at 0% and I'm earning 4% interest on it (before tax)

0% 15 months - Halifax All in One perhaps?? Just sent my application this morning

I think we are known as Card Tarts - according to Martin! LOL