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Consolidate your cards? The AA says money transfer offer can help

With January financial realities sinking in for many families, AA Financial Services is anticipating an increase in applications for its new AA Transfer Plus Credit Card, offering money transfers.

This comes as many premium retailers are reporting strong results from Christmas and New Year.

The AA says money transfer offer can help

  • The new card offers 6.9% pa rate on money transfers until the balance is repaid.
  • It can provide cost-effective consolidation of several debts using money transferred into a current account.

AA anticipates increase in credit card applications

Mark Huggins, director of AA Financial Services, says the Christmas spending spree will be leading consumers to find ways of tidying up their finances for the year ahead, at a time when 'Which?' reports that 46% of consumers paid for Christmas using credit or store cards.1

According to the UK Cards Association2, while only around 14% cent of card holders simply pay off the minimum each month, 27% make at least one minimum payment each year.

Huggins noted that "For cards bearing a high interest rate, including many store cards that might have been taken out to benefit from pre-Christmas discounts on gift purchases, charges can mount up.

The last thing you should do is ignore the bills dropping through the door.

Mark Huggins, AA Financial Services

"A prudent way to deal with big card bills, especially if you can't afford to pay them off straight away, is to get the interest rate down by consolidating them," Huggins says. "For many a personal loan won't be the answer where interest rates for sums below £7,000 are likely to be high. For smaller sums spread over a number of commitments, a longer term money transfer offer might be the answer. We believe the new AA Transfer Plus card, which offers a competitive, low rate for the life of the balance, is one of the most suitable on the UK market for helping consumers consolidate more expensive debts. It offers a genuine option to lower-value personal loans."

Promotional rate, and online application

The new AA Transfer Plus card, available online, offers a promotional rate of just 6.9% pa on money and balance transfers until the amount transferred is paid off. All transfers must be made within the first 60 days of opening an account and are subject to a 2% handling fee.3 The card offers freedom to pay off not just credit and store cards but other debts such as overdrafts. Customers can take as long as they need to pay the transfer off, provided the minimum monthly payment is made.

Huggins points out that at a time when typical interest rates for say, a £3,000 loan from high street lenders can be up to 29.9%, the new Transfer Plus card offers consumers a real alternative. He adds: "The card can offer certainty of cost on borrowing with no early repayment fees and flexible payments if circumstances mean customers can pay more in a particular month".

(23 January 2013)

1 According to Which? Money (30 December 2012) 46% paid for their Christmas using credit cards which also says that according to YouGov, the average UK household spent £835 on gifts, cards, food and drink.

2 Source: UK Cards Association statistics

3 This is a promotional offer. If a customer pays late or goes over their credit limit the 6.9% promotional rates will be withdrawn and they will be charged the standard balance and money transfer rates of 18.9% for balance transfers and 20.9% for money transfers.


Balance transfers can be used to pay off other credit and store cards. To settle other forms of finance customers can make a money transfer into their current account and pay them from there. Making a money transfer to a current account then using a debit card is an alternative way to pay for goods and services; however, there will not be the same protection under the Consumer Credit Act 1974. Even with the 2% fee, a money transfer at the 6.9 per cent promotional rate may still work out cheaper than paying with a higher interest rate credit card over the same period.

Transferring other debts to this card and paying only the minimum amount due each month may result in lower overall monthly debt repayments, but it may take longer and cost more to repay what is owed. Paying the minimum may also cost more than other forms of borrowing with fixed repayments over a fixed period. Other lenders may charge a fee for settling a loan early.

Rates for this card do not change on application. Customers are either accepted for the new Transfer Plus Credit Card product as offered with the 6.9% promotional rate, or they are not.

Promotional rate applies if balance and money transfers are made within the first 60 days. The rate applies until the transferred balances are paid off. Representative example 16.9% pa variable on card purchases. This is equivalent to 16.9% APR representative variable based on a credit limit of £1,200.

The AA Transfer Plus card is provided by MBNA Limited.