The 239 million pound transfer market

It’s one of the busiest transfer markets around and the money involved wouldn’t disgrace the Premiership. More than £239 million was spent in the past year in the credit card transfer markets as around 11.9 million people have switched accounts in the past year.

It may not be quite as expensive as Darren Bent joining Spurs for £16.5 million or as murky or drawn-out as Carlos Tevez’s attempts to leave West Ham for Man Utd but it probably matters more in the long-run.

MoneyExpert.com can show how to come out a winner in the credit card transfer market – or at least limit your losses…

Transferring debt

More than 149 credit cards offer zero per cent deals for balance transfers with some giving you as long as 15 months without any interest on any debts you switch to them.

Even six months at zero per cent is potentially a great offer and one that anyone who wants to clear their debts should take a look at.

If, for instance, you owe £1,000 that means you have at least six months to pay your debt off with no extra cost. That works out at around £166 a month without having to pay extra on the cash.

Transfer fees

However nearly all card firms now charge balance transfer fees. The average fee charged is around 2.63 per cent with some companies charging as much as three per cent.

All the fees are unlimited – that means there’s no upper limit for the amount you will be charged. In the past some companies capped their fees at £50 or even £30 but that is no longer the case. Companies say they need to charge the fees as they are costs involved in allowing customers to swap debts.

Whatever the case the charges can be hefty and make a major dent in your attempts to clear the debt in time.

On a £1,000 debt you’ll pay £26.30 on the average 2.63 per cent fee. However the more you are transferring the bigger the fee. On £5,000 you’ll pay £131.50 on average or as much as £150 for a three per cent fee.

Best 0% balance transfer cards (fees will apply)

Provider Balance Transfer Typical APR (variable)
Virgin 0% / 15 months 15.9%
Barclaycard 0% / 14 months 14.9%
Halifax 0% / 12 months 15.9%

Play your cards right

If you are transferring £5,000 and only have six months to pay the debt off at the zero per cent deal then you face a tough challenge. That works out at £833 a month – plus any fee – to clear the debt before you go on to your card’s standard rate. Generally that will be a hefty 16.1 per cent and the debt will soon mount up.

Lifetime balances

Anyone with major debts to clear should consider lifetime balance cards. They offer a low rate on any balances transferred – generally about five per cent or above.

The rate for the balance lasts until the debt is paid off no matter how long you take to clear your debt.

Provider Balance Transfer Typical APR (variable)
Citibank 4.89% lifetime (2.5% fee) 16.9%
Liverpool Victoria 5.76% lifetime (2% fee) 16.7%
Sainsbury platinum 5.78% (0% fee) 15.9%

Compare all credit cards

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