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Have a balance transfer card? Avoid this common mistake

Have a balance transfer card? Avoid this common mistake
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If you have debt on a credit card, shifting it to a 0% balance transfer card can mean you’ll pay no interest. That said, it’s important to use these cards correctly and ensure that you avoid a very common mistake.

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Why should I get a balance transfer card?

Before revealing the most common mistake that people make with these cards, it’s worth knowing that a 0% balance transfer credit card can be a lifesaver if you’re trapped in credit card debt. 

If you move your debt to a 0% balance transfer card, anything you pay off will go directly towards reducing your debt, rather than servicing the interest. This means you can clear your balance quicker. 

How do I find the best 0% balance transfer card?

In order to get a balance transfer credit card, you’ll first of all have to be accepted.  

However, too many applications in a short space of time may harm your credit score. To avoid this, use a credit card eligibility checker, which will list the cards you’ll most likely be accepted for.

Eligibility checkers conduct a ‘soft search’ that won’t impact your credit score. They’re a good way of ‘testing the water’ without having to commit to a full application.

Once you’ve identified the cards you’re likely to be accepted for, look at the best 0% balance transfer credit cards ranked by 0% length and fee. Generally, the longer the 0% period, the higher the fee. If you can clear the card within a shorter period, consider no-fee balance transfer options. 

What if the eligibility checker says my chances are low?

You may find it difficult to be accepted for a 0% balance transfer card. This can be a big problem if you’re paying credit card interest and you can’t move it to 0%.

If that’s you, learn how to improve your credit score. You may find it worthwhile to apply for a specialist credit rebuilder card.

Could you be rewarded for your everyday spending?

Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. MyWalletHero makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.

What is the common mistake that people make?

The common mistake that people make with balance transfer credit cards is using them to spend or withdraw cash.

Do this and you almost certainly won’t get the rate at 0%. That’s because if you withdraw cash on a balance transfer card, you’ll likely have to pay interest immediately. You may also be charged a cash advance fee on top. 

A similar warning applies to spending on a balance transfer card. Most 0% balance transfer cards will charge interest on purchases at the card’s standard rate. If you’re looking for a 0% credit card to spend on, look at 0% credit cards for new purchases.

Some balance transfer cards will offer a dual 0% spending and balance transfer period, or a short introductory 0% spending period. These cards are more flexible, making it possible to spend on them at 0%. If you go for one of these cards, always pay close attention to the terms and conditions to ensure you don’t spend outside of the 0% period. 

What other mistakes do people make with balance transfer cards?

Besides withdrawing cash and making purchases on balance transfer cards, there are other common mistakes to watch out for.

These include not making at least the minimum monthly payment. Remember, a 0% period doesn’t mean there’s nothing to pay. Other common mistakes include not clearing the balance or shifting to another balance transfer card before the 0% period ends. 

To learn more about what to look out for, see the ten dos and don’ts of a 0% balance transfer card.

How these 5 credit card ‘must-knows’ could help you…

We all know that a bad credit history makes it hard to borrow money – but did you know that improving your credit score could also help secure lower interest rates on credit cards, saving you hard-earned cash?

Find out how you could improve your credit score, and your credit-application chances, with our free report “5 Things To Know Before You Apply For A Credit Card”.

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