Top 6 balance transfer credit cards - Credit cards - News - Moneyfacts

News

Top 6 balance transfer credit cards

Top 6 balance transfer credit cards

Category: Credit cards

Updated: 04/01/2013
First Published: 04/01/2013

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 It is now over 6 months old so the content may be out of date.

The balance transfer card market has exploded in recent times, and consumers can now get up to 24 months in which to pay down their balances at a rate of 0%.

Top tips for using 0% balance transfer cards

If you have run up outstanding balances on high rate credit cards, store cards or even a current account overdraft, then an introductory interest-free balance transfer credit card can prove helpful.

Here are some quick tips on how balance transfer cards can work to your advantage:

  • What is a balance transfer card?

Balance transfer cards allow cardholders to use their available credit from one card to pay off the balances due on one or more other cards.

You can transfer a balance to most credit cards, although those offering a lengthy introductory 0% interest period can save you the most money.

These cards do not charge interest on the transferred balance for a set period, although still charge a balance transfer fee when you move debt across.

  • How long do 0% balance transfer periods last?

Introductory balance transfer periods vary from card to card.

Competition in the balance transfer market has heated up over the past couple of years, with the current market-leading deal from Barclaycard offering 0% on balance transfers for 24 months and the lowest from Danske Bank offering just 5 months (correct as at 04/01/13).

  • What happens at the end of the introductory period?

At the end of the 0% introductory period, your transferred balance will jump to your lender's standard balance transfer rate, which will tend to be well over 15%.

  • Can I make purchases on a balance transfer card?

Try to avoid making purchases using a balance transfer credit card, as you will be paying interest and not using the card in the cheapest and most efficient way.

Keep a separate card for purchases, particularly if you make frequent spends on your credit card.

There are cards on the market which combine 0% on balance transfers and purchases. These tend not to have the most competitive 0% periods, but do give you the convenience of owning just the one card to manage both transfers and purchases.

  • What happens if I miss a repayment?

If you fail to meet a monthly repayment, your provider may remove the introductory 0% offer and transfer you onto a more expensive interest rate.

Work out a repayment plan at the same time as taking out the card to avoid falling behind with repaying your balance.

Remember, if you use your card sensibly and plan ahead financially these cards can work for you. Never take out a credit card, or any form of credit for that matter if you are struggling financially or have ongoing debt problems.

Top 6 balance transfer cards:

With providers battling for a slice of the credit card market, the Moneyfacts.co.uk Credit Card Best Buys show there is now one card at 22 months, four cards at 23 months and one card at 24 months.

We've chosen 6 of the longest balance transfer period cards to help you decide.

Provider
Transfer Period
Fees/APR

Intro 0% for 24 months from date of card issue

  • Introductory balance transfer fee 3.20% - based on £2,000 transfer = £64
  • 17.9% purchase APR
Intro 0% for 23 months from date of card issue
  • Introductory balance transfer fee 2.60% - based on £2,000 transfer = £52
  • 17.9% purchase APR
Intro 0% for 23 months from date of card issue
  • Introductory balance transfer fee 2.85%, Min £3 - based on £2,000 transfer = £57
  • 16.9% purchase APR
Intro 0% for 23 months from date of card issue
  • Introductory balance transfer fee 3.00% - based on £2,000 transfer = £60
  • 18.9% purchase APR
Intro 0% for 23 months from date of card issue
  • Introductory balance transfer fee 3.50%, Min £5 - based on £2,000 transfer = £70
  • 17.9% purchase APR
Intro 0% for 22 months from date of card issue
  • Introductory balance transfer fee 2.90%- based on £2,000 transfer = £58
  • 16.9% purchase APR

Correct as at 04/01/13

What about lifetime balance transfer cards?

Once a balance transfer card's introductory 0% interest period expires, you will need to switch cards to avoid being left on a high rate. With a lifetime balance transfer card or low interest rate credit card, you don't have that problem.

These credit cards will take on your debt on another credit card, allowing you to pay it off on a low rate for as long as it takes you to pay it. If you want to spread out your repayment period, then you can do!

Lifetime cards charge a consistent low and flat interest rate which runs for the entire lifetime of the card, so you don't have to worry about transferring your balance at the end of the introductory period.

As a comparison we've chosen to compare the cost of credit for the best 0% balance transfer card and the lowest standard interest rate card on the market today.

Based on transferring a balance of £5,000 and the ability to repay at least £210 a month, the Barclaycard 24 month interest-free balance transfer visa works out cheaper at £160 for the balance transfer fee. The best low rate card from Sainsbury's Bank works out at £347.58 and would take 2 years and 2 months to pay at £210 a month.

Barclaycard Platinum 24 Month Balance Transfer Visa

0.0% for 24 months from date of card issue.

3.20% Balance transfer fee

£5,000 x 3.20% = £160


Sainsbury's Bank Low Rate Credit Card Mastercard

No balance transfer fee

6.9% APR

Monthly Interest Rate 0.558%
Repayment Time 2 years 2 months
Total Interest £347.58
Total Payment £5,347.59
Month Payment Type Payment Charges Balance
1 Monthly Payment £210.00 £26.71 £4,816.71
2 Monthly Payment £210.00 £25.69 £4,632.40
3 Monthly Payment £210.00 £24.66 £4,447.06
4 Monthly Payment £210.00 £23.62 £4,260.68
5 Monthly Payment £210.00 £22.59 £4,073.27
6 Monthly Payment £210.00 £21.54 £3,884.81
7 Monthly Payment £210.00 £20.49 £3,695.30
8 Monthly Payment £210.00 £19.43 £3,504.73
9 Monthly Payment £210.00 £18.37 £3,313.10
10 Monthly Payment £210.00 £17.30 £3,120.40
11 Monthly Payment £210.00 £16.23 £2,926.63
12 Monthly Payment £210.00 £15.15 £2,731.78
13 Monthly Payment £210.00 £14.06 £2,535.84
14 Monthly Payment £210.00 £12.97 £2,338.81
15 Monthly Payment £210.00 £11.87 £2,140.68
16 Monthly Payment £210.00 £10.77 £1,941.45
17 Monthly Payment £210.00 £9.65 £1,741.10
18 Monthly Payment £210.00 £8.54 £1,539.64
19 Monthly Payment £210.00 £7.41 £1,337.05
20 Monthly Payment £210.00 £6.28 £1,133.33
21 Monthly Payment £210.00 £5.15 £928.48
22 Monthly Payment £210.00 £4.01 £722.49
23 Monthly Payment £210.00 £2.86 £515.35
24 Monthly Payment £210.00 £1.70 £307.05
25 Monthly Payment £210.00 £0.54 £97.59
26 Outstanding Balance £97.59 £0.00 £0.00

Correct as at 04/01/13

What Next?

Compare the best 0% balance transfer card Best Buys

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.

Related Articles

Top credit cards for Christmas spending

‘Tis (just about) the season to be jolly, but before all that festive fun begins, chances are you’ve got a bit more shopping to do. But, if you’re turning to credit to fund things, you’ll want to use cards that offer 0% interest deals on purchases.

Spooky reality of high balance transfer fees

Credit card debt is scary at any time of year. While most might assume that opting for the longest deal on offer would save them the most, our data shows some of the longest deals can actually work out to be the most expensive.

Reward credit cards that become ‘pointless’

If you regularly use cards to pay at the till, you may have considered opening a reward credit card to earn points every time you spend. However, not all of these cards are as rewarding as they may seem…
 
Close