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Take advantage of the balance transfer war

Take advantage of the balance transfer war

Category: Credit cards

Updated: 14/05/2014
First Published: 14/05/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Things are definitely hotting up in the balance transfer market. Credit card providers are actively competing for your business with new products being launched – or improved – on a regular basis, with everyone clamouring to offer the longest balance transfer period and the best possible terms.

So why not take advantage of it?

Barclaycard leading the attack

Barclaycard has long been the leader when it comes to balance transfer credit cards, consistently taking the top spot in the Moneyfacts best buys by offering the longest balance transfer periods available.

It seems they're not willing to let anyone else get a look in either – just last week Halifax upped its 0% balance transfer period to 31 months, taking joint lead, so in response Barclaycard launched a whole new card that offers 0% interest on balance transfers for a full 32 months.

It was a swift response with Barclaycard launching their new offering in a matter of days, showing how seriously they take the market and how unwilling they are to compromise. Plus, it means they now boast the longest interest-free term ever provided, giving borrowers almost three years to pay off their debt.

Top 3 BT credit cards

The balance transfer war is definitely raging and it'll be interesting to see if any other providers try to steal the Barclaycard crown, but in the meantime here's a quick overview of the top three balance transfer credit cards:

Representative purchase APR (variable)
Card details
18.9% APR
  • Introductory 0% on balance transfers for 32 months from date of issue
  • Introductory balance transfer fee of 2.99% (if transfer is made within 60 days of account opening)
  • Introductory 0% on purchases for 6 months
  • Standard APR of 18.9% after introductory periods
  • Contactless payments of up to £20
  • Customers must be aged 21 or over with a minimum income of £20K
Representative purchase APR (variable)
Card details
18.9% APR
  • Introductory 0% on balance transfers for 31 months from date of issue
  • Introductory balance transfer fee of 2.89% (if transfer is made within 60 days of account opening)
  • Introductory purchase rate of 0% for first 6 months
  • Standard APR of 18.9% after introductory periods
  • Contactless payments up to £20
  • Customers must be aged 21 or over with a minimum income of £20K
Representative purchase APR (variable)
Card details
18.9% APR
  • Introductory 0% on balance transfers for 31 months from date of issue
  • Introductory balance transfer fee of 3.00%
  • Introductory 0% on purchases for first 6 months
  • Standard APR of 18.9% after introductory period ends (18.95% for balance transfers)
  • Age restrictions apply
  • Card must be applied for online

(Information & rates correct as at 14.05.2014)

Points to remember

To really make the most of the balance transfer war and to ensure you're getting the best value possible, there are several things you'll need to remember. Here are a few key points to bear in mind:

  • Consider the fee as well as the balance transfer period. If you can pay off your debt sooner than 32 months (for example) it might be cheaper to opt for a card that comes with a shorter balance transfer deal but a lower fee, such as Bank of Scotland's Platinum Online 15 Month Balance Transfer MasterCard, which offers 0% on transfers for 15 months but comes with a fee of just 0.7%.
  • Make sure you pay at least the minimum repayment each month and never go over the credit limit. If you do, the balance transfer deal will usually be forfeited and you'll revert to paying the standard interest rate.
  • Always try to repay the balance in full by the time the introductory period ends, but if you haven't managed to do so, consider switching to an alternative card so you can continue paying 0% for the remaining amount.
  • Try to think of balance transfer cards as ways purely to clear debt – i.e. try not to spend on them – because although most come with introductory purchase deals they invariably won't be as long as the balance transfer offer, and this means interest could start to be accrued.
  • Bear in mind that the headline rates will only be offered to those with decent credit ratings. If you've got a slightly blemished history you might not get the most attractive deals (and could even be rejected altogether) and could be offered less generous terms, with everything being entirely dependent on individual circumstances.

It's a great time to get on the balance transfer bandwagon with competition being fierce, giving you the chance to benefit from record deals and highly impressive rates. So, if you've got a balance that needs sorting, make sure to consider transferring it to one of these cards to clear your debt without pesky interest adding to your woes.

What Next?

Repay your debt sooner with a 0% balance transfer card

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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