Are looking for a new balance transfer credit card? Or have you just transferred your outstanding balance to a new credit card with an introductory 0% deal on balance transfers.
If so, then you need to pay close attention to the credit limit you have been given.
The credit limit you are given by the credit card company determines the maximum balance transfer amount you can actually transfer. In addition, this credit limit also pays an important role in your 0% introductory deal. Staying under your given credit limit means that you keep the 0% interest rate, for the full length of the introductory offer.
Almost all UK credit card companies now have a credit limit clause written in their customer’s credit card agreement. This clause says that if you exceed the credit limit you have been given, then the promotional 0% interest rates will no longer apply.
Watch Your Credit Limit
In other words if you go over your credit limit for any reason, then your 0% balance transfer deal ends. Instead your outstanding balance transfer will be charged at the standard APR interest rate of the card. This is often the standard rate of interest on the card which is typically now around 21.9%.
Going over your £2000 credit card limit for example by even £20, could end up being very expensive. Even a small amount over, could lose your long 0% introductory offer.
If your introductory balance transfer rate is withdrawn, then the standard interest rate will usually apply. This will take effect from the beginning of the statement date in which you exceed your credit limit.
It is therefore, very important for your balance transfer deal that you do not exceed your credit limit. If you have transferred a large balance and are close to your credit limit, be very careful about also using that credit card for purchases. This applies even if your credit card also an introductory 0% offer on purchases.
Remember that a £4000 credit card limit will be almost all used up if you make the maximum balance transfer of £3800. This is because of the amount transferred, plus any balance transfer fee, on top.
For your peace of mind, you may wish to use another credit card for any day to day spending. This will ensure that your 0% balance transfer deal is safe.
Read more of the latest balance transfer tips from Balance Transfer Expert.