Moving money

The Honeymoon Period

The 0% balance transfer fee isn’t forever – to do this would mean the bank would be lending you money, possibly permanently, with no hope of ever making money back on the amount they have given you via the credit card. During this period, people often try and pay off as much of their outstanding repayment amounts as possible, as a 0% transfer fee means that every single pound they repay makes it back to their lenders in full, killing off another part of the debit without incurring any more in the process.

But bear in mind that using the card for anything other than repayments is a risky thing to do. Although they charge no fees on balance transfers, their high interest rates lie within purchases, and using the card to buy goods and services will add on more repayments that they will then prioritise to make sure you’re paying off new debts to them rather than the ones you needed the o% transfer fee for in the first place. It sounds like a mouthful, but the clear meaning is thus: if you’ve taken out a card to repay, make sure that’s all you’re doing.

Tackling Everything At Once

When you’re thinking of using a 0% balance transfer card to pay off some long-outstanding debts, consider also moving debts outside of your credit cards onto the account as well. Many issuers allow you to move loans and other repayment schemes onto a new card account, which can be a brilliant way of ensuring you’re not paying any more than you need to. Bear in mind, however, that if you stick with the account past the 0% introductory period, paying off many debts through the one account can begin to add up – small repayments are not affected much by a 2-4% fee, but when you’re paying off thousands a month, every single decimal point could mean as much as the price of a week’s shopping.

Account-Hopping

Banks and credit card issuers tend to play games with people over repayments and small-print, so there’s no harm in playing a few of your own. The moment you set up a 0% account, start to organise another instantly, making sure it’s up and ready to go the moment the first account’s introductory period finishes. This seems like a lot of hassle, but think of it this way – if you keep switching your repayments from 0% account to 0% account, the introductory period never actually ends. It’s not illegal in any way, and of course the next issuer you switch to doesn’t mind or even care that you’ve just transferred from a rival – your move is more business to them. They are offering a service with no committed period of use, so they are powerless to stop or punish you for switching to a different account. Get the most out of your repayment strategy by playing as smart as they are.