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Idiots guide to credit cards

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Old Apr 7th, 2008, 12:56 PM   #1
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Idiots guide to credit cards


So the interest on my card is stupid, i want to move to another one.

Ive look at the virgin card and it seems pretty good http://uk.virginmoney.com/credit-card-v3/more-info.html

I get most of the stuff iit talks about, the only thing i dont really understand is the balance transfer bit.

it says "0% p.a. for 15 months on balance transfers*
(2.98% handling fee applies)"

So does that mean once i transfer my balance and have the fee added on, does that amount stay interest free for 15 months or untill i pay off that amount?
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Old Apr 7th, 2008, 20:05 PM   #2
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Depends on the terms of the agreement, but usually the fee is tacked on to the balance, then the whole shebang is interest free for the duration of the term. (15 months in your case) After that, any unpaid balance (including the fees) is treated as the same and interest accrues accordingly.

For instance if you transfer $1000 to the card, you'll have $29.80 in transfer fees for a total of $1029.80. I do know that some cards have a balance transfer fee of a certain percent or certain amount 'whichever is greater' so make sure you read the terms very closely to make sure it doesn't say that, and if it does, that you know what the "certain amount" is. Sometimes it's as high as a couple hundred dollars. So it wouldn't make much sense to transfer the balance of $1000 if it's going to cost you a couple hundred right on top. (Unless you can pay the entire balance off prior to the end of the 0%apr term).

Also something to watch is 'retroactive' interest. That is, if you do not pay the balance of the card off within the 0% term limit, interest accrues on the OPENING balance, not the balance it is at currently.

Certainly call the issuing company to iron out any details
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