Don’t miss out on 0% balance transfers by missing a payment

Don’t miss out on 0% balance transfers by missing a payment

author: Dan Griffiths

By Dan Griffiths


Balance transfer credit cards can be a good way to help to combine your existing credit card balances onto one card.

A 0% balance transfer offer also means you shouldn’t have to pay interest on the balance you transfer for the life of the offer – although you may have to pay a one-off fee when you make the transfer.

These interest-free periods often last for a number of months pre-specified by the credit card provider, but you may not be aware that missing just one repayment on your new credit card will likely result in this offer being revoked, and the interest-rate being increased.

A costly mistake

Should you miss a payment on a credit card with a 0% balance transfer promotional period, it’s likely that you’ll incur a charge, face damage to your credit history and have the 0% period replaced by the lender’s standard interest rate. Although the other penalties are still important to consider too, losing the promotional period may turn out to be incredibly costly.

If you have transferred a large balance to the card, you’ll now be faced with repaying this at the credit card provider’s standard interest rate, which will be a steep increase from the 0% initially offered. In a survey carried out by the Co-operative Bank, they found that a quarter of people in the UK who have taken out a balance transfer card breached the conditions, which means they lose the promotional period.

Plus, you may not notice this promotional period has been revoked, meaning you could be racking up big costs in interest without noticing. In an example, if your credit card balance was £2,500 and you missed a payment, if the credit card had a standard rate of 19%, you could have to fork out £426 over the course of the year if you just made the minimum payment.

It’s important to remember that missing a payment isn’t the only case where you could lose the promotional offer. Breaching the terms of your credit agreement in any way, like going over your credit limit, is likely to have the same effect. Remember to read the terms and conditions of your credit agreement before signing.

Set up an automatic payment

According to the Co-op’s research, over three million people across the UK have had the promotional 0% offer removed, on average losing out just four months after getting the credit card. Not only this, but just over a fifth lost out within their first month.

A good way to ensure you don’t miss a payment and lose your 0% period is to set up an automatic payment. If you set up a Direct Debit to cover at least the minimum repayment each month, you won’t run the risk of losing out. Then, if you want to clear more of your balance each month, you can.

Disclaimer: All information and links are correct at the time of publishing.

author: Dan Griffiths

By Dan Griffiths

Don’t miss out on 0% balance transfers by missing a payment Don’t miss out on 0% balance transfers by missing a payment