Credit card balance transfers
Some credit cards let you transfer the balance from another card. Transferring a debt from a card with a high rate of interest to one with low or 0% interest could help you pay off the debt faster.
But low or 0% interest credit cards are hard to get if you don’t have a good credit rating. This means you can’t rely on balance transfers as a way to deal with your credit card debts.
Also look out for fees when transferring a balance. Most credit card providers charge 2-3% of the amount you’re transferring as a one-off fee. If you’re transferring a balance to take advantage of a lower interest rate, the fees may mean you save less than you expect.
If you do transfer a balance, make sure you cut up the old credit card and close the account. Otherwise, you may be tempted to keep spending on both cards and you’ll end up with two debts.
0% interest credit cards
Some credit cards have an introductory period where no interest is charged. This period varies and some offer 0% interest for 18 months or more.
If you transfer to a 0% interest card, check the rate of interest when the 0% deal ends as this could be high.
Also check what is covered by the 0% deal. Often this will be for card purchases only and withdrawing money from a cash machine will be charged at a higher rate.
0% deals may end early if you miss a payment.
Credit cards and your credit file
Your credit card provider will share information with credit reference agencies about the way you use your card. This information will help other creditors decide how risky it is to lend money to you.
Like all debts, your credit file will show information about your credit card debts:
- The balance owed
- Your payment history
- Whether your account has defaulted
But credit card providers also share extra information on your credit file which other types of debt don’t show, including:
- Your credit limit
- How much you’ve spent each month
- How much money you’ve withdrawn from a cash machine each month
Credit card debt advice
If you’re struggling to cover the minimum payments on your credit card, it’s time to get independent debt advice. Contact our Helpline on 0800 138 1111 (free from all landlines and mobiles) or try our free online Debt Remedy tool.