Are you thinking about making a balance transfer? Read our hints and tips first.

It’s never wise to rush into a new financial arrangement – even if it looks like a great deal. If you’re considering moving your credit card balance to a new card, make sure you know exactly what to look for.

Interest rate

Balance transfer credit cards are, by their nature, offering attractive interest rates in the hope that new customers will take them. Currently, most credit cards are still offering a 0% rate for balance transfers. This means that you won’t pay any interest at all for a fixed period on the balance you move over to your new card. In some cases, the interest rate may be slightly higher than 0%, but the low interest period may last longer. Work out whether you can manage to pay off enough of your balance or even clear it completely within the 0% period, or whether a longer term would suit you better.

Fees

There are very few balance transfer credit cards that don’t charge fees nowadays. Since MBNA first began charging balance transfer fees in 2004, most of the credit card market has followed suit. If you can find a fee-free balance transfer card that also offers you the interest rate and other benefits that you need, then it’s worth serious consideration. For the cards that do charge fees, work out exactly what that fee would be so that you can see whether it’s worth moving over. Also look for cards that cap the upper level of their fee, so that you can get some benefit from moving your money.

Introductory periods

It’s very important that you know exactly when your introductory period starts and finishes. If you still have some of your balance left at the end of the period, it will immediately begin attracting the much higher standard rate that the credit card charges. If you’re intending to make a further balance transfer at the end of the initial period, make sure you’ve done your research and applied for your new card well before your current 0% offer runs out.

Comparisons

Before you commit to anything, make sure you have compared the balance transfer credit card offers available. An attractive interest rate could be accompanied by a short term, a higher standard interest rate or a 3% fee. You need to be sure that the deal is really going to work in your favour before you complete an application.

At which4u.co.uk, we do all the comparisons for you, so that you can see at a glance the differences between the balance transfer credit cards on offer. Once you’ve made a choice, just click on “Apply Now” to make a formal online application.

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