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Thread: 0% on Balance Transfers...

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    Headless Chicken Terbinator's Avatar
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    Question 0% on Balance Transfers...

    What does this even mean.

    Obviously i get the "0%" part but what is a balance transfer so to speak.

    I have two accounts with Nationwide, one is a standard 'smart card' which is deposit/withdrawals only and my other account lets me use a debit card which is marketed as a 'cash card' IIRC.

    Majority of my income goes into my 'smart card' account and thus balance (I'm guessing) after which i transfer it into my debit/cash card account for spending.
    Looking at my online statements, I haven't received any balance transfer charges so I'm guessing this doesn't apply to my account, but i keep seeing the term brought up everywhere and was worried that maybe I'm screwing myself over by transferring money between two accounts and that it's something i should be aware of for future reference ?

    Cheers for any help/info - hopefully that wasn't to hard to understand
    Last edited by Terbinator; 13-08-2010 at 04:06 PM.
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    Re: 0% on Balance Transfers...

    Balance transfers usually refers to paying off one credit card debt with another credit card agreement. This is attractive for the credit card firm offering the 0% as they will likely get the interest on the borrowed money in the future. It can also be attractive for a punter if the new credit card rates are more favourable or to effectively gain a month without paying any interest repayments.

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    Re: 0% on Balance Transfers...

    Thanks.
    I thought it may of been primarily aimed at credit cards. I just didn't want the end of the year to roll around and then get taxed of Nationwide for all the dealings between my two accounts Although I guess that was pretty clear seen as I've not been charged for transferring money
    Kalniel: "Nice review Tarinder - would it be possible to get a picture of the case when the components are installed (with the side off obviously)?"
    CAT-THE-FIFTH: "The Antec 300 is a case which has an understated and clean appearance which many people like. Not everyone is into e-peen looking computers which look like a cross between the imagination of a hyperactive 10 year old and a Frog."
    TKPeters: "Off to AVForum better Deal - £20+Vat for Free Shipping @ Scan"
    for all intents it seems to be the same card minus some gays name on it and a shielded cover ? with OEM added to it - GoNz0.

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    jim
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    Re: 0% on Balance Transfers...

    Yeah, it's a credit card only thing.

    Card A: £2500 debt @ 29.9%
    Card B: £0 debt @ 0%

    Card B lets you shift the debt from card A, so you save 29.9% for 6 months whilst it's free. Then they hope they can sting you once the 6 months is up for some tremendous rate.

    Unless you specifically asked to make a balance transfer from one account to the other, you'd never have to pay that rate.

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    Re: 0% on Balance Transfers...

    HOWEVER... bear in mind that they DO charge a TRANSFER fee....

    so I just don't see how they're all still getting away with it being advertised as 0% on balance transfers.. when they charge you a lump for doing it.

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    Re: 0% on Balance Transfers...

    Well you'll pay 0% interest on that balance for 6 months,
    but nowadays most charge a single 3% at the time of the actual balance transfer.

    So you'd pay £150 to do that £5000 transfer, but pay no more interest for 6 months...


    Gone are the days of 0% transfers, 0% interest, and high savings account interests,
    where you could gain a few hundred quid profit in interest via stoozing
    Last edited by mikerr; 14-08-2010 at 12:35 AM. Reason: Wrote 500 instead of 5000
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    Re: 0% on Balance Transfers...

    It's not like the old days is it? The good old days of no fees where you could move thousands around for years with no interest

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    Re: 0% on Balance Transfers...

    Quote Originally Posted by mikerr View Post
    Well you'll pay 0% interest on that balance for 6 months,
    but nowadays most charge a single 3% at the time of the actual balance transfer.

    So you'd pay £150 to do that £500 transfer, but pay no more interest for 6 months...
    erm... I assume that's a typo... you'd pay £15 to transfer £500

    The other thing people get stung on with these schemes is payment allocation, where any payments made are allocated to the lowest interest item first.

    Easiest explained by example..
    • Open Card with 0% on Balance Transfers, 29.9% on all others
    • Transfer a balance of £1000
    • Balance on card is £1050 (assuming 5% fee)
    • Setup standing order payment of £100/month
    • After 3 months balance is £750
    • (no interest, 3 payments of £100 made)
    • Car needs new tyres £100 - bit short at moment - i'll stick it on the card till I get paid
    • End of month Pay £100 as usual and extra £100 for tyres

    • THIS is where they sting you as the extra £100 is not paid off the tyres charge, but off the Interest Free balance - The £100 for the tyres is now charged at the 29.9% until the transfered balance is paid off !
    • Balance is now £650 (£750 from last month + £100 for tyres -£200 payment)
    • BUT the £650 is now £550 of balance transfer getting charged no interest, and £100 getting charged at the full 29.9%
    • The £100 earning interest is not going to be touched by payments until the £550 is cleared.


    Obviously in this example it's only going to take 5 months to pay the balance and the interest will be about £10 - but it's easy to see how people talking in real world terms with >£3000 balance transfered needing to lay out an emergency £500 can get in serious trouble very quickly.

    There's only a couple of cards which DON'T do this, Nationwide being the only one I can remember ATM.

    To the OP - you're on a pretty good one banking with Nationwide if you're not massively savvy of the financial systems, they may not be the cheapest but they're always fair.
    Last edited by Barakka; 13-08-2010 at 09:38 PM.
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    Re: 0% on Balance Transfers...

    Quote Originally Posted by Zak33 View Post
    HOWEVER... bear in mind that they DO charge a TRANSFER fee....

    so I just don't see how they're all still getting away with it being advertised as 0% on balance transfers.. when they charge you a lump for doing it.
    Some do, but not all. Obviously though, if you're the type of person that desperately needs that kind of card, you're unlikely to get the ones that are completely fees free.

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