Super Balance Transfers

It it a bird? Is it a plane? No it's a Super Balance Transfer! While normal balance transfers just let you shift debt from other cards, when they're super, you can shift debt from your bank account. This allows you to move overdrafts or loans onto 0% cards for up to 16 months, saving you £1,000s.

• Super Balance Transfers?
• How to use them
• Best Buys: Top Cards
• The Mule Card Technique
• Related Articles / Discuss

Super Balance Transfer... to the rescue!

What is a Super Balance Transfer?

A balance transfer is a credit card transaction that lets you shift debts from one provider to another, so you now owe the new card the money, hopefully at a much cheaper rate. These are designed for people with existing debts on credit cards, allowing you to slash the interest you pay, possibly saving £1,000s over the life of the debt. Read a full guide to Balance Transfers.

Super Balance Transfers are a much rarer beast.

On top of allowing standard balance transfers a few credit cards permit you to pay money straight into your bank account, yet you still get the special cheap balance transfer interest rates. Therefore, you now have the 0% debt on the card and the cash in your bank account. This allows you all types of opportunities, hence why I call them Super Balance Transfers. Example uses include...

• Clearing Overdrafts. This effectively shifts the overdraft to the card, so it's now at 0% plus the fee (also see the Best Bank Accounts guide)
• Shifting Loans. Once the money's in your bank account, then use the cash to pay off any loan off, checking there are no penalties for doing that (also see Cut Existing Loan Costs guide)
• Making a big purchase. As the money is in cash it's a way of paying for something, where credit cards won't usually be accepted. Of course though, be very wary borrowing, keep the amount as low as possible, plan and do a Budget for the repayments.
• Stoozing. This is an advanced technique for making free cash from credit cards (see the Stoozing guide)
  

How to do a Super Balance Transfer...

What you need to do depends on the answer to one simple question...

Do you already have a Virgin, MBNA or Alliance & Leicester credit card?

If you do, sadly you'll already need to have an Egg Money credit card (it's not accepting new customers at the moment though). lf you do, then jump to the Mule card section, which is much more complex. That's because all the cards that allow simple Super Balance Transfers are part of the MBNA group, and if you already have one you won't get a second.

If you don't have an MBNA card already, then simply read on...

The Top Super Balance Transfers

First and foremost, a huge warning... many cards allow you to pay cash into your bank account; the difference is most charge a fortune for it. The key to a super balance transfer is that you’re charged the special promotional interest rate. So, to get this, never ever withdraw cash and never try and spend on the credit card. Instead, just ask the card provider to...

"Do a balance transfer to my current account"

This way you'll get the cheap balance transfer deal, and the cash will end up in your bank. For double surety, you can even explain exactly what you think will happen, and get them to confirm it. Don't use the term "super balance transfer" as that's a term I've coined and unless they use this site the customer service rep won't have heard of it.

Also, it's crucial you set up a direct debit to make AT LEAST the Minimum Repayment each month; if not you’ll lose the special deal and pay the 15%+ APR on all debts. Though it's massively preferable to pay more than this, so the debt is cleared by the end of the intro deal.

Which cards let you do this?

Two cards currently allow this, yet always treble-check the details before making any payment, as terms and conditions can be changed at any time.

• Virgin 0% for 16 months. Plus a 4% fee.
  
  Currently, the Virgin* card offers 0% on 'super balance transfers' for 16 months for a one-off fee of 4% (higher than the standard 2.98% it charges for balance transfers). You can do the super balance transfer at any time within 60 days of opening the account.
  
  Quick Stats. 0% length: 16 months. Fee: 4% APR: 18.6%. Minimum Income: N/A Min Repay: GREATER of £25 or £5 plus the interest Anecdotal Info: Credit Limits: Mid. Ease of Acceptance: Mid
  
  
• MBNA Platinum 0% 13 Months. Plus a 4% fee.
  
  The MBNA Platinum* will give you 0% on these transactions too, for 13 months, for a 4% fee. Here, you can do the 0% transfer at any time within 90 days of account opening.
  
  Quick Stats. 0% length: 13 Months. Fee: 4% APR: 15.9%. Minimum Income: N/A Min Repay: GREATER of £25 or £5 plus the interest Anecdotal Info: Credit Limits: Mid. Ease of Acceptance: Mid
  

Pay it off or shift the debt before the 0% ends.

Of course once you've got the cash in the bank, you can use it for whatever you intended. Yet as well as always meeting the minimum repayments remember to ensure the debt is cleared before the end of the 0% period.

There are two simple ways to do this. Hopefully you can simply repay it, if not, six weeks before it ends, you need to apply for a new 0% Balance Transfer card to shift the debt again. If you want a free text or email reminder to do this, use the Tart Alert.

The Mule Card Technique

This is a sophisticated technique that requires concentration and über-organisation. Do not attempt it otherwise, as mess it up and it can cost you big.

The cornerstone is the Egg Money credit card. You'll need to already own one of these cards, as it currently isn't accepting new customers. Don't get this confused with the normal Egg credit card, it's a totally different product.

This is a hybrid credit card as it has some of the functions of a current account, allowing you to have a positive balance, as well as easy money transfers to other bank accounts. This feature enables it to be used as a ‘mule', for shifting cash from a 0% credit card deal into your normal, everyday account.

Therefore to do this, as well as the Egg Money card, you will need a credit card with a decent 0% offer for balance transfers (see the Best Balance Transfers article).

How does it work?

Grab a 0% card for balance transfers and use this to pay off the Egg Money card. This means the Egg Money card now has a positive balance and this money can then be moved into your bank account. Therefore you now have cash in your bank account equal to the amount of 0% debt on the balance transfer card.

Got that? Probably not, so follow the guide below…

Using a Mule Card

STEP 1: 0% card Egg Money
Initial Scenario Loan needed: £3,000 Egg Money : £0 Bank account : £0 0% card: £0	Ask your 0% balance transfer card to do a £3,000 balance transfer from Egg Money. In practical terms this means it will pay £3,000 off the Egg Money card, even though no debt exists there. This shouldn't normally be a problem, as most credit cards' terms don't specify a debt must exist to do a balance transfer, however if specifically asked then don't lie, as that would be fraud.
STEP 2: Egg Money Current Account
Current Scenario Loan needed: £3,000 Egg Money: £3,000 in credit Bank account: £0 0% card: £3,000 in debt	Now we need to get the money from Egg Money into your bank account. This is simple as Egg Money has a direct facility to do it. Go to the balance transfer section of its website, and then select the option to do a balance transfer to your bank account. In other words it now pays the £3,000 into your bank account at no charge (because you're in credit).
STEP 3: Current Account Loan
Final Scenario Loan needed: £3,000 Egg Money: £0 Bank account: £3,000 0% card: £3,000 in debt	You now have £3,000 in your bank account for the loan and £3,000 on your 0% card. In other words you now have a 0% loan. You need to pay at least the card's fixed minimum repayment each month (usually 3% of the outstanding balance), yet to clear the card over the 0% period you need to repay more than that.

What happens when the 0% period ends?

Hopefully you have already repaid the debt, after all that is the point of this technique. If you've been unable to, you need to move the debt onto a card which offers cheap balance transfers, to avoid paying expensive interest.

In that case, six weeks before it ends, you need to apply for a new 0% Balance Transfer card to shift the debt again. Use the Tart Alert to remind you to do this.