Benefits of a 0% balance transfer credit card

22 November2010

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Not all credit cards are designed for spending money. There are actually a number of different types of credit cards designed with different purposes in mind, one of which is a 0% balance transfer credit card.

0% balance transfer credit cards charge no interest on balances moved over from other cards (and occasionally other debts, such as overdrafts) for a limited period.

This can make them ideal for repaying debt, because you`ll be able to repay the balance you`ve transferred without interest if you can do it quickly enough. In other words, the whole of each payment you make will go towards paying off the debt itself - not towards interest.

On the other hand, if you want to delay repaying your debts for a while, a 0% balance transfer credit card could also be useful for that. If you wish, you can simply transfer the balance across and leave it until your 0% interest period expires, safe in the knowledge that the debt can`t grow in this time. Of course, you`d still have to make the minimum required payment every month.

However, you must have a plan in mind for when the 0% period expires. To avoid paying a potentially high rate of interest, you`ll have to either repay the debt in full by this time, or transfer the debt to a similar deal on another card.

Is it a good idea?

A 0% balance transfer credit card gives you an excellent opportunity to repay more of your debt than you`d usually be able to in a given space of time - or, as we mentioned, delay having to repay the whole amount. As long as you are sure you can afford to repay the debt in the long run, this needn`t cause any problems.

Just remember that if you struggle to repay what you owe at any point you could find yourself in a tricky situation. Remember also that there are no guarantees that you`ll be able to find another 0% interest credit card at the end of your existing deal (and that you`ll also probably have to pay a fee to transfer the balance), so it`s better if you can pay off the debt in full before the 0% period ends.

If you have a debt that you think will take longer to pay back, a longer-term personal loan or standard low-rate credit card might be more suitable.

Compare 0% balance transfer credit cards and a range of other deals with our free comparison tool.

Review our latest credit card best-buys

Product	Transfer rate & period	New Purchases rate & period	Representative APR
Barclaycard Platinum Credit Card with Extended Balance Transfer	0% 26 mths 3.5% Fee	0% 6 mths	18.9% (variable)
	Representative example: With this credit card the representative APR is 18.9% (variable) based on an interest rate of 18.9% (variable), transfer fees of 3.5% and a credit limit of £1200.
Barclaycard Platinum Credit Card with Balance Transfer	0% 25 mths 2.8% Fee	0% 6 mths	18.9% (variable)
	Representative example: With this credit card the representative APR is 18.9% (variable) based on an interest rate of 18.9% (variable), transfer fees of 2.8% and a credit limit of £1200.
Tesco Bank Clubcard Credit Card for balance transfers	0% 25 mths 2.9% Fee	0% 3 mths	16.9% (variable)
	Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2.9% and a credit limit of £1200.
Halifax Balance Transfer Credit Card	0% 25 mths 3% Fee	0% 3 mths	18.9% (variable)
	Representative example: With this credit card the representative APR is 18.9% (variable) based on an interest rate of 18.95% (variable), transfer fees of 3% and a credit limit of £1200.
NatWest Platinum	0% 24 mths 2.9% Fee	0% 6 mths	17.9% (variable)
	Representative example: With this credit card the representative APR is 17.9% (variable) based on an interest rate of 17.95% (variable), transfer fees of 2.9% and a credit limit of £1200.
Royal Bank of Scotland Platinum	0% 24 mths 2.9% Fee	0% 6 mths	17.9% (variable)
	Representative example: With this credit card the representative APR is 17.9% (variable) based on an interest rate of 17.95% (variable), transfer fees of 2.9% and a credit limit of £1200.
MBNA Platinum Credit Card	0% 23 mths 2.5% Fee	0% 3 mths	16.9% (variable)
	Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2.5% and a credit limit of £1200.
Fluid Balance Transfer Card	0% 23 mths 2.89% Fee	0% 3 mths	16.9% (variable)
	Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2.89% and a credit limit of £1200.
MBNA Credit Card	0% 22 mths 2% Fee	0% 3 mths	16.9% (variable)
	Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2% and a credit limit of £1200.
Lloyds TSB Platinum MasterCard	0% 21 mths 1.5% Fee	0% 3 mths	17.9% (variable)
	Representative example: With this credit card the representative APR is 17.9% (variable) based on an interest rate of 17.95% (variable), transfer fees of 1.5% and a credit limit of £1200.
Nationwide Building Society Credit Card	0% 20 mths 1.55% Fee	0% 3 mths	15.9% (variable)
	Representative example: With this credit card the representative APR is 15.9% (variable) based on an interest rate of 15.9% (variable), transfer fees of 1.55% and a credit limit of £1200.
We provide a representative range of products on competitive terms and do not act exclusively for any credit provider. Credit limits may vary depending on your circumstances.

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