Who offers balance transfers for their existing customers?
"I want to start clearing a debt with a 0% balance transfer credit card but I'm not sure that I'll be accepted for a new card. Is there an alternative?"
There is an alternative to joining the balance transfer rat race: banks offer personalised deals for their existing customers.
Like any 'official' balance transfer offer, it's essentially a way of asking a card provider to take on debt in return for a fee for transferring the debt and, possibly, the interest due on the balance that's moved.
Unlike a deal that's advertised, however, the card provider sets the terms they're willing to offer based on how much they want to retain customers.
The deals on offer are rarely better than advertised introductory balance transfer offers but that doesn't matter as long as they can cut the cost of debt. And many can.
How to do it
So let's get practical: if they're not advertised, how do people get these deals?
Calling the provider
The first method is to simply call the credit card company.
Card providers might offer a deal which reduces the interest rate of the debt if the cardholder is:
- having trouble meeting the repayments or
- wants to stop the cardholder from taking a balance transfer deal and moving the debt on elsewhere
Technically it's not a balance transfer - there's no transfer - but the effect is the same.
The provider is unlikely to offer a limited time 0% deal but an APR reduced by a third or even halved could make a huge difference to the total cost of repayment.
And all for the price of a phone call.
Here's a few ways to get the ball rolling:
"Hi - I currently have a balance of £X on this card and I want to pay it all off soon. Could you decrease my interest rate to help me do that?"
"Hello - I'm thinking about moving my balance over to a low interest deal but I'd really rather stay with you if I can: could you match X% [life of balance transfer rate]?"
Calling other providers
Cardholders that have one or more credit cards, in addition to the indebted card, might get an even better deal from calling their other providers.
In this case, the deal works just like an official balance transfer and the benefit for the card provider that gets the debt is clear: they get a one off fee plus future business from any interest payments or fees on the account.
For that reason, these card providers are more likely to extend 0% deals or very low APRs (less than 10%).
However bear in mind that, just as with a normal balance transfer, it's only possible to balance transfer an amount that is 90-95% of the available credit limit (of the new card) so, before calling, it's worth checking that the amount to move and the amount available match up.
Here are a few ways to start the conversation with customer services:
"Hi - I'm calling because I have a credit card with X and I'm paying X% APR on it, I'd really rather move that money here at a lower rate: would that be possible?"
"Hello - I'd like to move a debt to this credit card. What's the lowest interest rate I could pay back at?"
Don't ask, don't get
In short, as your mum, and many motivational speakers, have said before: if you don't ask, you don't get.
There's absolutely no guarantee at all that asking current providers to cut a deal will work but it does work sometimes so calling up and being polite but firm is the only way to know for sure.
Having said that, it's worth getting some idea of how the conversation might go over with different providers by listening to other people's experiences.
We've got a few in the next section.
Who offers these deals?
Since this type of balance transfer is usually unofficial and extended on a case by case basis there are few hard and fast rules about what's available.
However, there is one official scheme - from Barclaycard - and several providers who are well known for offering these kinds of deals.
As we note above, though, there's nothing to stop any provider offering these balance transfers so it's always worth asking.
Finally, letting us know about your successes (and your failures) in the comments below helps other people to benefit from your experiences. Please share!
Those with a credit card from Barclaycard are the only ones that currently have access to an 'official' existing customer life of balance transfer offer.
Eligible customers can transfer balances from providers other than Barclaycard and get a low rate - currently 6.9% p.a. variable - until the balance is repaid in full.
If the provider agrees, the offer means that customers can move up to £5,000 to their Barclaycard or 90% of their credit limit, whichever is lower.
This deal is mentioned, but sadly not in any more detail, on this page on the Barclaycard site.
MBNA, Tesco and Halifax
Finally, these three providers seem to have the most consistent reputations for extending both 0% and low interest balance transfer offers.
MBNA, in particular, seem to often be quick to offer 0% balance transfer deals to their existing customers, albeit often with shorter periods and for a higher transfer fee - often around 5% for existing customers (that's in comparison to around 3% for new customers).
MBNA are also known to extend any 0% money transfer deal to existing customers when offering new 0% balance transfer deals to them as well.
Money transfers work in a similar way to balance transfers, except that they allow the cardholder to move credit to a current account instead of using the deal to pay off another credit card. Find out more here.
Are they worth it?
Just as with any balance transfer offer, it's worth asking - is it worth it? - before moving a balance to an existing provider.
Very often, it is worth it, not only because it reduces the cost of debt but because it can generate more motivation for paying off the whole amount.
However, it's not always the case: if the transfer fee is high or the cardholder may end up paying interest after the 0% period, staying put may be cheaper.
Please see our full balance transfer guide for more information on what makes a good deal.
It's also worth noting that even small special offer interest rates can make a huge difference to the cost of the debt.
See our guide on the differences between life of balance and 0% deals for more advantages but, for example, let's say a cardholder has £5,000 debt on a card with a 18.9% p.a. interest rate and only makes the minimum monthly payments (3% or £5).
They could pay about £4,600 in interest over 22 years.
If they moved the balance on to a 6.9% p.a. for life deal and continued making the minimum repayments they would pay only around £900 in interest over 14 years.
It's a huge difference (although needless to say, the real moral here is to never make only the minimum repayments).