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UK credit
cards and balance transfers
Credit cards are pretty popular and in widespread use in UK. Credit cards
are accepted at most shops and other merchant stores/outlets. As in the US,
UK credit cards too are on offer from various banks and financial
institutions. Again, UK credit cards too offer a number of benefits which
vary from one UK credit card to another (though there are a lot of common
benefits too which are same across various UK credit cards).
Due to the fierce competition in the UK credit card market, various UK
credit card suppliers offer attractive balance transfer schemes too. There
are some UK credit cards that offer 0% balance transfer for 9 months and
there are others that offer 0% for 6 months. However, the catch here is that
these UK card credit suppliers differ on their standard APR rate i.e. the
APR rate which comes into effect after the expiry of the introductory 0%
balance transfer offer. Further there are some UK credit cards that do not
offer a 0% balance transfer but instead offer a better standard rate (APR)
throughout. Some UK credit card suppliers combine 0% offers with accrual of
points on a rewards programme. Another popular thing among UK credit cards
is to combine cash back offers with balance transfers. Then there are some
very attractive offers which give 0% not only on balance transfers but also
on Purchases (for a short period like 5 month or so). You also have a few UK
credit cards that can be procured by people with bad credit history too (of
course, the decision on approval of such a credit card application will lie
with the credit card supplier).
So what does one do if one wants to transfer balance to another UK credit
card. Well, it’s quite simple. You need to take stock of your current
financial situation and determine if a period of 6 months or 9 months (or
maybe even 12 months) would be sufficient for you to fully payback the dues
on your UK credit card. If the answer is in the affirmative, just go ahead
for the UK credit card that offers 0% balance transfer for this period (even
if the standard APR rate is a bit higher). However, the assumption here is
that once you payback the debt on your UK credit card, you will stick to
controlled spending and will pay your credit card bills in full amount by
the due date for payment; otherwise, the choice of a higher standard APR
will hit you very hard and you will be in deeper trouble. However, if you
think that 9 months is not sufficient to pay back the debt on your UK credit
card, then you should look to strike a balance between the zero APR period
and the standard APR rate, and choose a UK credit card which leads to the
least total outgo (you will need to sit with a calculator and calculate the
total outgo on various UK credit card offers).
This is the most basic aspect that you need to consider before you decide on
which UK credit card is the best for transferring balance. Other things like
0% on purchases, reward programmer points etc are secondary things.