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Charges on balance transfers of 0% balance transfer rate cards

I have some questions about credit cards in general and 0% credit cards in particular. I am talking about cards issued to UK consumers.

1 - What is a balance transfer? Is a transfer of funds from my credit card to one of my bank accounts a balance transfer? What's the meaning of charging for cash advances, but not for balance transfers? I can always transfer the money to my account and take the money out, so what's the point? 2 - rates credit cards (is there any other authoritative website in this respect?). I went to check the details for the Barclaycard offer, and I couldn't see any reference to the charges to be paid for transfers (not the interest) in the pages explaining the various charges (@ ). There is only a charge mentioned for cash advance payments. But then the small prints (@ ) states:

"3.2 Charges

(a) We will charge a handling fee each time you or any additional cardholder make a cash withdrawal, make a balance transfer, purchase travellers' cheques or use a Barclaycard cheque. The handling fee is

2% of the amount with a minimum fee of £2.00, except for Initial Visa where it is 2.5% with a minimum fee of £2.50."

So they are actually charging 2%-2.5% on each balance transfer. Is that what it says, or am I missing something here?

3 - If the answer to point 2 above is that there are in fact charges to be paid for each transfer, does something like a 0% interest + 0 balance transfer charge credit card exist in practice? The small print for egg, for instance, do not seem to mention any charge for balance transfers.

If my doubts have already been answered and/or discussed , please feel free to refer me to the appropriate resources.

Thanks in advance, Anthony

Reply to
Anthony Ross
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Most cards will charge you for a balance transfer as a cash withdrawal.

However for introductory periods many cards will allow balance transfers without charges and with 0% interest for a period.

A card such as Mint will send you cheques which you can use to draw money from the card and put it straight into a high interest account.

So you can have money free on the credit card whilst earning interest whilst it is on deposit.

When the interest free period ends withdraw sufficient to pay the bill and keep the interest earned.

But check the terms of each card, some do not allow this to be done.

Reply to
Keith.F

Sometimes. Different card issuers treat things in different ways. Most don't allow balance transfers to current accounts, but some do (egg and MBNA at least). Also you have to read the t&c to see what the charges are - MBNA helpfully say that they "may" charge for balance transfers. Once you have an egg card you can do a balance transfer from more-or-less any card to the egg card and then to your bank account.

There are internal charges for ATMs, someone has to pay securicor to deliver notes and someone has to fill them, check that they contain the right number of notes etc. Consumer pressure seems to have mostly stopped explicit charges for cash from bank accounts, but the costs are still there somewhere. Your bank gives you free current accounts, including cash, in the hope that you will have an overdraft or buy other products which make them some money, but the CC companies don't have the same incentive. OTOH electronic funds transfers cost very little, so for e.g. egg it was probably simpler to set up a computer system which would transfer between any pair of accounts of any kind than try to separate them.

Also, when interest rates were high card companies didn't want to give an interest-free period for cash (or indeed balance transfers), but now rates are so low that it hardly matters. In effect card companies are making so much money from the merchant charges and from customers who carry an interest-paying balance at 15% or more that they don't care about giving a bit of free money to people prepared to work the system.

That's how I read it, but I think I've read that it doesn't apply to the introductory offer. In any case the general view is that the Barclaycard offer isn't worthwhile in practice, there are so many cards offering 6-9 months at

0% with no strings that you can keep rolling balances over anyway.

No, and egg are indeed giving you free money (even to existing customers at the moment). They've even provided a savings account with a six-month bonus to hold the proceeds ... Likewise with MBNA, who seem to have a fairly relaxed attitude to letting people double-dip.

One thing to watch out for is that payments are usually applied to interest-free balances first, so if you have a card with 0% on balance transfers only you shouldn't spend anything on it during the 0% period.

Reply to
Stephen Burke

Its intended to pay off existing debt rather than to give you cash. Many companies will only allow you to transfer to another card. Some cards such as Egg will allow you to transfer to a current account, supposedly to pay off an overdraft. So you can transfer from a 0% interest card to Egg and then to your bank account.

Try

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and the motley fool who both rate credit cards.

Read the small print for each card. Many cards claim that they routinely charge for balances transfers, but waive that for special circumstances. Most dont seem to charge during 0% interest periods. It looks as though Barclays does charge, but then again Barclaycard never seems to come up as a good deal.

Most credit cards have a helpline number on the back you can call for confirmation of the situation.

Neb

Reply to
Nebulous

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