Not too many years ago getting a credit card was easy.Special offers with 0% interest were routinely available and you could often transfer your existing balance without paying a fee.
How things have changed.
There are still more than 230 different credit cards on offer to the public.
However card providers have really tightened up their acceptance criteria.
These days they are heavily focussed on good quality customers, rather than the chase for lots of new ones.
Effectively there is a two tier market and those people with great credit ratings and secure employment largely have the pick of the cards available.
As credit ratings deteriorate, so too will the number of rejections, as well as the chances of getting a competitive interest rate.
Transferring your debt
The 0% balance transfer deals remain available.
But they now routinely come with a fee attached that is typically between 2.50% and 3% of the amount you are seeking to move.
If you are hoping to transfer an outstanding credit card balance to a 0% deal elsewhere there are a number of aspects worth exploring.
A very useful "pre-application" tool has recently appeared on the Barclaycard website which will give you a fairly strong indication as to which of the Barclaycard range you may be eligible for.
It places a search footprint on your credit file but is not a formal credit application.
The advantage of using it is that if it suggests that you are eligible for one of their 0% balance transfer offers, this will also be a significant pointer as to whether you may be able get similar 0% balance transfer deals elsewhere.
Past history
It is also worth checking with one of the credit reference agencies - Callcredit, Equifax or Experian - that there are no inaccuracies on your file, and that they do not financially link you with anyone with whom you should no longer be associated.
Query anything that looks wrong.
Other things that will help your cause are to ensure that you are on the electoral roll and that when you fill in the credit card application form you give as many details as possible.
So, for example, when it asks for telephone contact numbers make sure that you list your home, work and mobile telephone numbers.
If you have credit cards that you are not using then think about closing them.
There are two reasons for doing this.
Firstly, when a prospective new card provider looks at your credit file it will increase the credit "headroom" available to you.
Credit card providers want desperately to avoid yet more potential customer over-indebtedness.
Secondly, once you have closed the card, after a gap of about nine months you will generally be treated as being a new applicant, with that card provider giving you access to introductory offers again.
Bear in mind that it is fairly standard practice not to permit a 0% balance transfer from one card to a different card with the same provider.
However before you close a credit card, think about this.
If your credit rating is not particularly good you may struggle to get another card or indeed one that is offered at a decent rate.
What is on offer?
The current credit market is heavily stacked in favour of new customers in the form of things like 0% introductory offers and enhanced initial rewards.
For those with good credit ratings this gives a significant incentive to change credit cards on a regular basis.
Thankfully, discovering the most competitive credit card rates and offers is now really quick and easy, given the proliferation of price comparison websites and newspaper best-buy tables.
There is a 0% balance transfer deal available for as long as 16 months courtesy of the Virgin Credit Card, although it does levy a 2.98% balance transfer fee.
There are more than 150 credit cards currently offering 0% balance transfers with the average 0% deal lasting for 9.7 months and levying a 2.83% balance transfer fee.
One bank is offering a 0% balance transfer without a fee; albeit this Northern Bank 0% offer only lasts for five months.
Bear in mind that balance transfer fees differ in amount so this aspect could be your determining factor when deciding between 0% balance transfer deals of similar duration.
Glitches
Even when offered a 0% balance transfer deal, it is possible that it will not permit you to transfer the entire amount you require.
So, for example, you may have an outstanding balance of £3,000 but only be allowed to transfer £2,000 onto the new 0% deal.
There is also the issue of the order of repayment allocation which is what happens when you make a partial repayment.
The vast majority of cards attribute your payments to the debt on which you are paying the lowest interest rate first.
If all you use the card for is the initial 0% balance transfer then this does not matter so the trick is to make sure that this is exactly what you do: only use it for the 0% balance transfer.
Get a different credit card to use for everything else such as ongoing purchases.
The Department for Business Innovation and Skills is currently investigating various issues in the credit card market, including the order of repayment allocation, so this aspect may get addressed in due course.
Source: news.bbc.co.uk/2/hi/business/8524101.stm
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