More about transfers

If you’re looking to keep all of your credit card borrowing in one easily manageable place. If you need more time to repay what you owe on existing credit cards or if you’re currently paying a high interest rate on store cards or other credit cards a balance transfer could help.

A balance transfer moves your balance from an existing credit or store card to another card with a different provider.

Balance transfers can help you move multiple credit card balances onto a single credit card, giving you only one monthly payment to manage. Or to move your balance to a card with a lower interest rate, potentially reducing your borrowing costs and giving you more time to pay things off.

You can transfer a balance as little as £100, the minimum amount usually allowed. While the maximum is usually 93% of your credit limit to leave room for any potential interest or fees.

There are 2 main costs of a balance transfer:

• Your transfer fee, which is a percentage of the amount you’re moving added on to your balance at the time of the transfer. 
• And interest, which you’ll pay over time until your balance is cleared. This is based on your balance transfer interest rate.
  

Sometimes, you’ll find a credit card with an interest rate as low as 0% for a set period of time as part of an introductory or promotional offer. But once the offer runs out, any remaining balance will be charged at your standard balance transfer interest rate until repaid.

To help you make an informed decision, at Lloyds Bank we’ll always tell you your balance transfer fee and interest rate up front.

Now, let’s see how a balance transfer with an introductory or promotional offer works in practice with help from Elliott.
Elliott has just got a brand-new credit card offering him a 0% balance transfer interest rate for 12 months on all transactions made in the first 90 days. His balance transfer fee is 3%.
Elliott also has £2,000 of existing balances spread over two cards both with annual interest rates of 20% per annum.

If Elliott keeps his balances on his current cards, paying £200 per month every month, it will take him 11 months to clear them and he’ll pay £187 in interest. But if he moves his balances to his new card with the 0% introductory balance transfer interest rate, paying his 3% transfer fee he could clear his balances faster.

If he pays £206 per month, it’ll only take him ten months to clear his balance and he’ll pay the £60 transfer fee with no interest charges at all. This means that, in total, Elliott could save around £127 using his 0% interest rate offer on balance transfers.

But we’ve made a few assumptions.
Firstly, that Elliot started with a balance of £0.
That Elliott never breaks his card terms and conditions. That he’s made no other transactions on his new card during this time.
And finally, that he clears his full balance before his 0% interest rate offer ends.

If you plan ahead and consider your options, a balance transfer can be a useful way to help you manage your borrowing all in one place.

Thanks for watching.
Visit lloydsbank.com/creditcards for more information.

If somewhere doesn’t accept credit cards or if you need funds in your current account to pay for an unexpected bill, for instance. A money transfer could help.

Available on some credit cards, Money transfers move money directly from your credit card into your own UK current account and can help you be more flexible with your finances in emergency situations.

You can transfer as little as £100, the minimum usually allowed. While the maximum is usually 93% of your credit limit to leave room for any potential interest or fees.

When it comes to requesting a money transfer, there’s two main costs you should be aware of.
The first is your transfer fee. A percentage of the money you’re moving added on to your balance at the time of the transfer.
The second is interest, which you’ll pay over time until your balance is cleared.
Sometimes, you’ll find interest rates as low as 0% for a set period of time as part of a promotional offer. But remember that once the offer runs out, any remaining balance will be charged at your standard money transfer interest rate until repaid.

To help you make an informed decision, at Lloyds Bank we’ll always tell you your money transfer fee and interest rate up front.

Now let’s see how a money transfer with a promotional offer works in practice with help from Elisha.

One month, Elisha gets an unplanned £500 repair bill for her car. Unfortunately, she hasn’t budgeted for this in her current account. Plus, her garage doesn’t accept credit cards.

However, she has a credit card with a promotional offer. It has a money transfer fee of 3% and 12 months of 0% interest on any money transfers made in the next 30 days.To cover the cost of the repair, she makes a money transfer of £500 from her credit card into her current account.
Now, she can pay for the repair with her debit card.

Including the 3% money transfer fee, which costs her £15. Her overall credit card balance is now £515.
She can pay this off in 10 monthly payments of £51.50. She can pay it off in one go on her next payday. Or, however she chooses.

Elisha won’t pay any interest as long as she pays at least her monthly minimum payment, clears her full balance before her 0% interest rate offer ends, stays within her credit limit and doesn’t spend anything else on her credit card. This also assumes that she had no existing balance on the card to begin with.

But it’s important to note that if she doesn’t clear her balance before the end of the offer period she’ll pay interest at her standard money transfer interest rate.

Like Elisha, you can use a money transfer to help you stay financially flexible. But be sure to consider all your available options to make sure that a money transfer is right for you.

Thanks for watching.
Visit lloydsbank.com/creditcards for more information.