MONEY expert Martin Lewis is warning anyone with a credit card to shift their debts now.
This is because the best deals are quickly being pulled from the market.
Martin Lewis is warning credit card users to transfer their debts
Previously you’ve been able to transfer a balance on a credit card and get up to 43 months interest free, but the lengths are now getting shorter, the founder of consumer website MoneySavingExpert wrote in his weekly newsletter.
In fact, the longest 0 per cent balance transfer length has dropped below 30 months for the first time since 2013, and they’re likely to keep dropping.
“So this is a clarion call to anyone with existing credit or store card debt,” Martin wrote.
“Do not dilly-dally if you pay interest – sort it now while deals are still reasonable or you may miss the boat (though as we’ve no crystal ball, there are no certainties).”
Alamy The best deals on balance transfer cards are getting worse as lenders adapt to stricter rules
Balance transfers let you move money from an existing credit card to a new one.
Often you’ll be charged a fee for making the switch, but you won’t pay any interest on that money for a set period.
The problem is that the amount of time you have to clear the debt before you’re hit with interest is getting shorter and shorter.
The best deal on the market currently gives customers an interest free period of 29 months, compared to a whopping 43 months in 2017, according to data by comparison site Moneyfacts.
This is because lenders are adapting to rules announced by the Financial Conduct Authority (FCA) last year, which said that they need to ensure customers pay back their debt quicker.
And that means anyone with credit card debt should really consider making the switch as soon as possible.
Balance transfer cards: What you need to knowSHIFTING your balance can be a great way to cut the cost of your debt. But you must use them properly so you don’t just add to it.Always clear your debt – Credit card firms don’t offer these deals out of the goodness of their hearts. They rely on you not clearing your balance by the time the 0 per cent deal comes to an end so it can start charging you interest.
Always make your payments – If you don’t keep up with your monthly payments, you could lose the 0 per cent offer and start being charged interest. Always try and pay-off more than the minimum payment too to clear your debt quicker and don’t spend on the card either.
Check your deal – Like with all credit cards, you might not be offered the headline deal if you don’t have the best credit history. Use MoneySavingExpert’s eligibility calculator to see what deals you are likely to be accepted for.
How to find the best deal
First of all, you need to make sure you get the best deal you possibly can before you switch, Martin advised.
Making a lot of applications is a waste of time, and if you then get rejected, it’ll also damage your credit score.
Luckily, there are free eligibility checkers that you can use to check your chances of being accepted beforehand.
MoneySavingExpert offers one that won’t leave a mark on your credit file, as well as comparison websites uSwitch and Money.co.uk.
Corbis Avoid being slapped with hefty interest rates by moving your debt to another card
But it isn’t only about going for the longest interest free period, you also need to factor in any balance transfer fees (a one-off amount based on how much debt you move), Martin said.
“Go for the lowest fee in the time you’re sure you can repay.
“Calculate how long you think you’ll take to clear the debt, add a bit for safety, then pick the lowest fee within that time. Unsure? Play safe and go long,” he added.
You also need to carefully read the terms and conditions of each deal, and especially pay attention to the phrase “up to” in descriptions.
“Unless you have a great credit score, it is best to avoid ‘up to’ cards, especially if the eligibility calculator shows you have high chances on other cards,” Martin said.
Top interest free balance transfer cardsTHESE are the best balance transfer cards with the longest interest free periods currently around.
Halifax 29 Month Balance Transfer Credit Card – Apply Here
This card from Halifax comes with an interest free period of up to 29 months on balances transferred within the first 90 days.
After this, you’ll be hit with interest rate charges of 19.9 per cent so make sure you move your debt beforehand.
The card has a balance transfer fee of three per cent, at a minimum of £3.
Sainsbury’s Bank Balance Transfer Credit Card Mastercard – Apply Here
Sainsbury’s balance transfer credit card is the joint-best as it also comes with an interest free period for up to 29 months.
Just like the card by Halifax, it comes with a 19.9 per cent interest rate, as well as a 3 per cent balance transfer fee.
The balance transfer card from HSBC comes with an interest free period of 28 months on transfers made within the first 60 days.
Afterwards, you’ll be hit with an interest rate of 21.9 per cent.
It comes with a balance transfer fee of 1.4 per cent, or at a minimum of £5.
Once you’ve got the card
If you’ve been successful in your application, you then need to remember the “golden rules”, Martin advised. These are:
Clear the debt or transfer again before the 0 per cent ends or pay the high annual percentage rate (APR)
Never miss the minimum monthly repayment or you can lose the 0 per cent
Don’t spend or withdraw cash. It usually isn’t at the cheap rate
You must usually transfer the debt within 60/90 days
If you can’t sleep because of the debt, you shouldn’t apply for a balance transfer card, Martin said.
Instead you should get free, one-to-one debt counselling from organisations such as CAP, Citizens Advice, National Debtline or StepChange.
“They’re there to help, not judge. The most common thing we hear after is: ‘I finally got a good night’s sleep,” he added.
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Last month, Martin Lewis issued new fraud warning after “spate” of fake HMRC scam calls.
The money guru also revealed how to claim back £100s from your energy provider.
And MoneySavingExpert claimed over £1.7million Brits are owed a £137 council tax refund.
Money Saving Expert Martin Lewis says on Loose Women ‘I so don’t want to be here’ as he opens up about losing his mum aged 11
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