Martin Lewis tells consumers you need to make a major change before interest rates rise TOMORROW
MARTIN Lewis has urged Britons to move their debt to a 0% balance transfer card before an interest rate hike is announced tomorrow.
The MoneySavingExpert founder says the best card will stop taking apps today – so it’s crucial consumers act now.
If you have credit card or store debt that earns interest, you can transfer the money you owe to the card.
This means you can focus on paying down the debt, rather than the amount added in interest, and it can help you get back into the black faster.
The Bank of England is expected to announce a rate hike tomorrow, which means any interest you pay could go up.
In today’s MoneySavingExpert newsletter, Martin said Virgin Money’s 0% balance transfer card will close tonight.
“If you’re paying interest on credit card or store debt, the window for securing cheap long-term interest is closing quickly,” the bulletin said.
“A balance transfer is where you get a new card to pay off old cards, so you have to pay that instead, but WITHOUT INTEREST.
“That way more of your repayments wipe out the actual debt, so you’re debt free faster. Yet the longest 0% deal in the market is being pulled imminently .”
The Virgin Money option is currently the best on the market as it charges no interest for the first 35 months – currently the longest period available.
There are other offers available, and you should do your own research to make sure you choose the card that best suits your needs.
MoneySavingExpert has a comparison tool to help you decide which balance transfer card will work for you.
It should be noted that only people with the best credit scores will be accepted for the best offers.
Even if you are accepted, you may also be offered a shorter 0% period and be charged a higher transfer fee.
You should never miss the minimum monthly repayment or you could lose the 0% interest free period, which means it will cost you more.
After the interest period, you’ll be charged 21.9% per annum, so be sure to pay off your debts by then or consider transferring the remaining balance to another card.
You should not spend or withdraw money as you will be charged and it may affect your credit rating.
Consumers usually need to transfer their debts within the first three months of opening the card to get the interest-free offer – so be sure to check the terms and conditions.
In general, you also cannot transfer debts between cards belonging to the same banking group.
For example, if your debts are on a Virgin Money credit card, you are unlikely to be able to transfer the balance to the 0% card from that lender.
How to transfer your debts to a 0% card
You can usually apply for a balance transfer credit card online or over the phone, and banks may be able to help you at a branch.
To apply, you will need to provide your name, address and email as well as income details so that a provider can assess your eligibility.
You’ll also need to provide details of how much money you want to transfer to the new card, but you can often do this after you’ve been approved.
Candidates must be over 18 years old.
If your request is approved, you will need to transfer the balances within a specified time frame, usually around 60 or 90 days.
Your old balance will then be cleared and you can start making interest-free repayments to your new card.
There are many different approaches to clearing your debts, including the snowball method of paying off the smallest first.
We spoke to a debt expert who shared her top tips for paying off the money you owe this year.
If you are having difficulty you should seek help – there are organizations that can offer you free debt advice.
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