My son, unbeknownst to my wife and I, has built a debt of several thousand pounds on a number of store cards. If I apply for an interest-free credit card, can I transfer the balances from his card to mine?
Name and address supplied
Balance transfer cards, if used wisely, can be an excellent tool in your money kit to minimise costs and reduce your debt. Or, in your case, save an offspring from a bit of financial bother.
The deals on offer currently last around two and a half years - the longest interest-free deal is on offer from TSB, lasting 29 months. M&S Bank offers 28 months interest free.
That doesn’t, however, mean that they are entirely fee free. When you transfer a balance to one of these cards, you have to pay a balance transfer fee - these vary between providers, but usually come in at around three per cent. TSB’s is 2.95 per cent, M&S’ is 2.85 per cent.
This will be added to your overall debt, so if you were to transfer £2,000 with a three per cent fee, you’d incur a £60 fee.
You won’t necessarily get the longest deals when you apply - the best are reserved for people with a healthy credit record, with a good history of repaying debt and long-standing credit relationships. Sometimes a card provider might accept your application but offer you a shorter deal, or a lower credit limit.
Now for some essential advice - before you go ahead to apply for one of the longest deals, make sure you use an ‘eligibility checker’.
These are tools that ask for some basic information - name, address, age, who you bank with and your income, and carry out a ‘soft’ search on your credit report, verifying your details and looking at your history. These checker tools then return a list of cards you’re likely to be accepted for, sometimes with a percentage probability.
Most of the major price comparison sites offer them, as well as credit reference agencies like Experian and information website moneysavingexpert.com.
I’d highly recommend you using one before you make an application, as this will narrow down the cards you’re more likely to be accepted for, and reduce the risk of rejected applications.
A full application for a credit card will require a ‘hard search’ which will appear on your credit file and remain on there for six years, so other lenders will see it.
It won’t tell them the outcome, but too many failed applications in a short space of time will look troubling to a prospective lender and may harm your chances of getting the credit you want in the future.
All being well with a successful application, you’ll be able to transfer your balances over to your new card.
To answer your question, you can transfer balances from multiple cards in one go, including your sons.
You’ll need to enter the 16-digit number from the card, as well as the amount you want to transfer over. Your son’s cards will be paid in full, and the debt will appear on your new card within a few working days.
It is vital that you never use these cards to spend, even if they offer interest-free spending for a short period. The interest outside of the transfer deal is usually north of 19 per cent APR.
Instead, set up a monthly direct debit, dividing the balance plus the transfer fees by the number of months you have interest free to calculate the amount you need to pay off each month.
This way, you can make sure that you - or your son, know how you plan to recoup the money - clear the debt while avoiding interest altogether.
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