%VIRTUAL-SkimlinksPromo%Halifax has upped its game in the balance transfer stakes by launching a 30-month 0% card.
Halifax has launched its longest-ever 0% balance transfer credit card, boasting an interest-free period of 30 months.
There is a 3% fee attached to any transfers and an APR of 18.9%.
Providers are in fierce competition in the balance transfer market, with all sorts of cards offering well over two years free of interest on any balance you transfer.
Borrowers are in a great position to take advantage of this competitive climate, giving themselves time to clear their post-Christmas debt without having to make hefty interest payments.
The new Halifax card has a six-month 0% period on purchases, giving a little relief to borrowers who may want to spread the cost of something new over this period.
The fee of 3% is higher than that of the only other 30-month 0% card from Barclaycard. Moving a debt of £2,000 onto the Halifax card would cost £60. It's only available online, so you won't be able to apply in a local branch.
There is also no guarantee you'll get the full 30-months as this depends on your credit rating. At least 51% of applicants will receive the advertised rate but the rest could be offered a less-favourable deal.
Checking your credit rating before you apply will give you an idea of how likely you are to get the best offer.
This area of the market is hotly contested right now, with a lot of providers are offering very similar deals, as you can see from the table below.
A balance transfer card is a good way of clearing your debts cheaply, but it only works if you use the card correctly.
As soon as the 0% period ends the interest rate will kick in. If you haven't cleared the card at this point, you'll have to start making higher payments which could negate the benefit of the 0% period. So make sure you clear as much of your debt as possible during the interest-free term.
It's also important to look at the fees associated with a balance transfer. On the top-rated cards these are generally quite high, such as the 3% with the Halifax card.
If you're not moving over that much money, and don't require 30 months to pay it off, a cheaper card with a lower fee would be more suitable. The Fluid Low Fee Visa, for example, has a fee of just 0.75% and a 0% period of 12 months.
Don't wait until you need to apply for credit to view your credit record – do it now so you know where you stand and can deal with any disputes. When applying for credit, you give the lender permission to view your record, so it makes sense to view it yourself first.
You can access your record via any of the main credit agencies in the UK. By law, all the credit agencies are required to provide you with a one-off copy for just £2 so don't be hoodwinked into signing up to pay a monthly fee.
Your report shows what credit accounts you've had and whether you've made repayments on time and in full. According to Experian, items such as missed or late payments stay on your credit report for at least three years, while Court Judgments for non-payment of debts, Bankruptcies and Individual Voluntary Arrangements stick around for around six years.
Your credit report shows the current address at which you are registered to vote as well as details of other addresses you've been linked to in the last six years. Another section lists people you have a financial connection with, such as a joint mortgage. When you apply for credit, lenders are able to look at their credit history as their circumstances could affect your ability to repay what you owe.
Scrutinise your record to make sure there are no mistakes. Even a minor error such as an incorrect address or wrongly linked account could hinder your chances of being approved for credit so make sure all your details are correct and that all your borrowings are on record. If there is a discrepancy, contact the three main credit agencies to get it corrected.
A default notice is note that a lender puts on your credit file if you fall behind with your payments. It is a warning sign to future lenders about your reliability to repay credit and could mean that they will be less likely to lend to you or will increase the interest rate.
If the default notice is incorrect, perhaps because you have repaid the loan in full or did not take out the credit and suspect that you have fallen victim to fraud, you can apply to have a default notice removed. A default notices will only be removed if it is factually incorrect – not simply because you are embarrassed by it.
Start by writing to the agency asking it to either remove or change the entry that you think is wrong. It will investigate the matter and find out whether you have been the victim of ID theft or a bank's mistake.
Within 28 days from receipt of your letter the agency should tell you how the bank has responded. If the bank agrees to change the entry, they will authorise the agency to update their records. They should also send updates to any other credit reference agencies they use.
You can also contact your lender directly to query a mistake. If the lender agrees to the discrepancy, ask them to confirm this in writing on their letterhead and send a copy to the agency, asking them to update your file.
If you are unhappy with the response or would just like to explain a missed payment on your file you can send a Notice of Correction. This is a statement of up to 200 words that will be added to your file. Although lenders don't have to take this information into account, it at least gives you the chance to tell your side of the story.
Experian states that agencies will also help you escalate the dispute to a third party arbitrator if necessary, such as the Information Commissioner's Office.