Credit card balance transfer deals

                                                                                         

With nearly 200 balance transfer offers on the market, you may be misled into thinking that you have an infinite choice. However, in the search for a new service provider to take charge of your account balance, there are two obstacles to jump. First, you can not transfer balances between cards supported by the same supplier, or is part of the same banking group. For example, it is not just MBNA issue its own cards, it endorses and Virgin Money Card Alliance & Leicester, the name of a couple.

Card are seeking funds for new funds, rather than recycling the balance between its brands.

Secondly, most of the offers are only available for new customers, so we can not afford to complete the circuit card providers too frequently. Typically your account should have been closed between 12 and 24 months before they can be regarded as a new customer.

75% of the balance transfer offers available today are offered by vendors of just five, with Co-operative Bank to take a slice of 26% and 27% MBNA. So effectively, while 45 cards brands offer the balance transfer offers, when shopping for a new pact of your choice is more than halved, limited to only 17 vendors.

It is important to check the fine print to deal with a balance transfer, and to determine who is the provider of credit at the same time for your new credit card and address, otherwise you may find yourself with a new card and transfer your balance or to be denied the accused at the normal rate.

Not only do you have to navigate through the maze of credit providers and banks to find the address for you, that the tightening of credit criteria you may also find it more difficult to be accepted or you are perhaps much lower offered a credit limit.

This time last year, we saw the beginning of a new chapter in the long march credit card 0% war which took the life of balance transfer door to new levels. However this year, the market has remained relatively calm, with the same contenders longstanding retaining their existing offerings.

All of this said, it is still worth investing some time to find a competitive home for any existing balance, especially considering rates have increased in recent months and this is expected to continue in 2008.

On average, the rate of purchase is currently about 16%. By providing a 0% deal for 12 months (assuming you made a minimum repayment of 2% / £5), you could save up to £140 interest on a balance of £1K. And if your budget to pay off the balance of 0%, then the interest savings is still £64.

But you have to consider more likely to suffer a tax balance transfer. The average is now 2.56%, and 96% of these costs are uncapped.

About the author:
Simon Duffy writes for the Financial Blog a UK Finance Blog talking about all aspects of personal finance including loans blogs, credit cards blogs, mortgages blogs, insurance blogs and more.

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