Balance transfer and purchases cards combine the benefits of two of the most popular types of credit card, offering the user great flexibility.
What are balance transfer and purchase credit cards?
Balance transfer and purchase cards offer their users unrivalled flexibility, by combining features from two of the UK's most popular credit card types; the balance transfer, and the 0% purchase card.
Of course, many table-topping deals in the balance transfer best-buys also offer 0% purchases, and many leading purchase cards offer balance transfers, so they could both reasonably be classed as combined transfer and purchase cards. However, that doesn't help customers who are looking for the 'best of both worlds' i.e. the ability to balance transfer to their card, without worrying about incurring higher rate interest on purchases made in the future.
We therefore draw a distinction between lopsided products, with one feature considerably more generous than the other, and cards that offer a genuine combined utility. It is for this reason that we rank the cards in our balance transfer and purchase table in order of the lowest duration of a single element of the deal. And, these cards are what we mean when we speak of ‘balance transfer and purchase’ products.
What are the benefits of balance transfer and purchase cards?
Individually, balance transfer cards and 0% purchase cards are both excellent tools for particular functions. However, both have traditionally been relatively inflexible in their usefulness. Purchases made on a balance transfer card were often penalised with high-interest rates, which reduced the product’s ability to be a money-saving tool. Similarly, while users of 0% purchase cards could avoid interest on new purchases, without owning a separate card, they had no opportunity to save money on existing balances, by transferring them to a card offering a lower rate of interest.
Balance transfer and purchase cards offer a solution to the weaknesses in both these products. Cardholders can now transfer their existing balance to the card to help reduce their interest payments, but they can also continue to use their card without incurring high rate interest.
Which UK card issuers offer transfer and purchase cards?
There was a time when transfer and purchase cards were unusual, albeit popular, products in the UK market. However, as balance transfer durations have ballooned to exceed the periods many people require to repay their debts, customers have sought products which offer additional features. This has resulted in an increase in the number of balance transfer and purchase cards available, and products are now available from many of the most popular card issuers in the UK, including:
Bank of Scotland
Do transfer and purchase cards offer other benefits?
The UK credit card market is very competitive, and many card issuers offer unique features to sway applicants towards otherwise generic products. Whether these are beneficial to you depends on your lifestyle, personal circumstances, and future spending plans, but they can include:
Given that transfer and purchase card users do not incur interest on purchases during their promotional period, they are a good product with which to shop. Many card issuers encourage this shopping by offering reward points. Once earned, customers can exchange their points with popular loyalty schemes for rewards.
Discounts & Cashback
Some cards offer their users discounts on particular products and services when they pay with their card. Others offer app-based cashback schemes - where customers save selected discounts to their card and receive a statement credit for the discount if they make a qualifying purchase.
Although less common than other features, some transfer and purchase card issuers offer their users advantageous foreign currency transactions. In some instances, currency purchases are commission-free, while others offer commission-free foreign purchases, which would usually attract a charge for being a 'non-sterling' transaction.
How do I get a balance transfer and purchase card?
Well, finding one is easy. We've done the hard work and listed them above, based on the durations of the transfers and purchases they offer. However, whether they'll accept you is a different question.
To be granted a card, you'll need to meet the eligibility requirements of the product. These requirements vary from issuer to issuer, but all will require you have a good credit rating.
Like other types of borrowing, lenders who issue credit cards want to ensure that they are repaid (with interest accrued) any money they lend. As such, any record of a bad payment history or bad debt will discourage them from accepting you.
Check your credit rating before you apply for these cards to ensure you meet the eligibility criteria for your desired product before applying, as declined applications will negatively affect your chances of securing credit elsewhere.
Getting the most from your balance transfer and purchase card
Although balance transfer and purchase products offer excellent flexibility, they are not right for everyone. The disadvantages these products have are shared with most other credit cards, but they still need careful management to deliver maximum benefit. As such, users should be careful to:
Honour the contract
Card issuers only offer 0% deals to approved applicants who sign their credit agreement. The credit agreement is the foundation of your relationship with your card issuer. It details their obligations to you, as well as your contractual obligations to them.
If you break the terms of your credit agreement, your card issuer is very likely to withdraw your card's preferential rates immediately, meaning that your balance will start to accrue standard (high) rate interest.
One of the main reasons people break their credit agreement is that they forget to (or cannot) pay their minimum monthly payment in full and on time. Some customers also exceed their approved credit limit.
If you want to retain the advantageous rates that initially attracted you to a product, avoid these mistakes. Most card issuers encourage the use of direct debits to automate payments, and you should take advantage of this, as it simplifies the repayment process.
Aim to Pay
All good things come to an end. So, when your introductory rates expire, the interest charged on your remaining balance will increase. If you've become accustomed to paying no interest whatsoever, the rate at which interest accrues can be alarming. Where possible, you should look to transfer the balance to a new card offering a 0% deal.
That said, no-one can predict the future with absolute certainty. The competitive and regulatory environment is forever in a constant state of change, as is the economic circumstance of individuals and the wider country. As such, there’s no guarantee that you'll be able to transfer when your deal ends, and you should plan for this possibility. Initially, you should ensure that you do not borrow too much, and can always pay back what you owe, even after a significant change in interest. You should also plan from the outset to repay your entire balance before you deal expires. Not by banking on a lottery win in the last week of your deal, but by making slow and steady payments every month that result in you being debt-free as soon as possible.
Simply put, the best 0% balance transfer and purchase for you will be the one with the best 0% durations that will accept you as a customer.
Most card issuers publish their eligibility criteria, so check it before you apply. If you're in any doubt, focus on cards that offer a soft-search eligibility checker. These tools do not affect your credit score and can give you a good understanding of your chances of success before you make a full application. They aren't always 100% accurate, but they do at least prevent you making applications that will be declined outright.
Yes. However, you should consider this very carefully before you do. Someone may agree to repay the money to you, but legally the debt is yours. You will be fully responsible for its repayment and liable for any consequences if it is not.