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Thursday, March 12, 2020

You want to pay off your debts

 Could a 0% balance transfer card with no fee be the answer for a shorter repayment period?
With credit transfer cards you can pay off the debts over an interest-free term
This term can be up to 29 months and is usually for a fee
A small number of cards do not charge transfer fees, in return for shorter interest-free terms of up to 20 months

Those who want to pay off their debts cheaply in January could use 0 percent prepaid credit cards that don't incur any fees, provided they are happy to pay off their balance faster.

There are currently eight credit cards on the market for which no fees are charged when transferring your credit, according to the financial data provider Moneyfacts.

In return, the cards give you less time to pay off your debts before interest rates rise to your account balance. However, this may not be as much of a decision-making decision as it used to be as the conditions for transferring the account balance continue to shorten.

In January 2017, the longest interest-free term was 43 months, now it is only 29 months.

In the last three months of 2019, the availability of mortgage loans from banks and building societies to households decreased today, according to the Bank of England.

The credit terms survey found that the length of the interest-free periods available for both balance transfers and new purchases was reduced.

The top 29 month offer is offered by Halifax. A fee of 3 percent of the value of each transfer made is charged for the 0 percent credit transfer card.

If you're happy to have nine months less to pay off the debt, NatWest and Royal Bank of Scotland customers have access to 20-month credit-free credit cards with no fees.

The free-of-charge credit transfer cards with the longest available terms are the Platinum Visa card without fee credit from Barclaycard and the daily Mastercard credit card from Santander.

Both have an interest-free term of 18 months, while Barclaycard's offer includes the added benefit of £ 20 cashback if you transfer a balance of £ 2,500 or more within 60 days of opening the account.

Santander's APR is 18.9 percent lower, while Barclaycard is 21.9 percent by default after the balance transfer period.

Credit transfer credit cards have long been a popular choice for consumers trying to settle or mix debts, while many begin to pay off credit card balances in January.

Britain's credit card debt was £ 72.1 billion at the end of November, a decrease of £ 120 million from the previous month. This is the latest figures from the Bank of England.

The Financial Conduct Authority has introduced rules designed to encourage persistent borrowers to increase credit card repayments due to concerns about the amount of debt accumulated on plastic, attributed to the disappearance of balance transfer transactions and the reduction in interest-free conditions.

In January 2017, there were 122 interest-free balance transfer transactions with an average maturity of 0 percent of 659 days.

By January, the number of offers had dropped to 76 and the average term had dropped to 536 days.

It's worth noting that if you have bad credit, you are unlikely to be able to take advantage of these top 0 percent balance deals - despite the fact that they are likely to benefit those who continue to have debts.

The tariff must be offered to at least 51 percent of the applications accepted.

This means the rest could be accepted for one card, but one not as good.

In addition, those who wish to transfer their balance may sometimes only find out after completing an application whether the credit limit of their new card covers what they want to transfer. However, the Experian credit bureau will let you check whether this is the case before applying.

Experian’s Head of Consumer Affairs, James Jones, said that using more than 90 percent of a card’s credit limit, missing credit card or other debt payments, and only monthly minimum payments could be reasons why you may not get the balance you want. Receive transfer offer.

How it piles up
The compromise means that in return for no transfer fee, you give yourself a shorter deadline for repayment, which means you have to pay back more each month.

Below we compare what this compromise costs if you want to transfer £ 3,000, 5,000 and £ 10,000 to either Barclaycard's free credit transfer card or the longest term offered by Halifax on the market.

With Barclaycard you get 18 months before the expiry date, with Halifax 29 months, but for a fee of 3 percent.

This makes £ 3,000 £ 3,090, £ 5,000 £ 5,150 and £ 10,000 £ 10,300 - but offers lower monthly payments to keep in mind:

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