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Get a 0% card before the best deals go
If you're thinking about getting a 0% credit card, don't hang around. The best deals won't last for long.
Get a 0% card before the best deals go
If you spent too much on your credit card over Christmas, a 0% balance transfer card could be a great help. After all, it’s much easier to pay off your debt if all your repayments can go towards your actual debt rather than chunky interest payments.
So you won’t be surprised to learn that applications for new 0% cards always rocket in January, and we usually see some cracking 0% deals at the same time.
Things have been no different this year. Just before Christmas, Barclaycard and Nationwide cut the fees on some of their 0% cards, while Bank of Scotland and Lloyds followed suit with reduced fee offers this month.
Problem
However, there’s just one problem. Barclaycard has already withdrawn the reduced fee offers on two of its 0% cards.
If you had applied for the Barclaycard 24-month Platinum card before January 7th, you wouldn’t have had to pay any interest on your transfer for two years, and you’d have been charged an incredibly low 2.1% fee.
But if you applied for the card now, you’d be charged a 3.2% fee. That works out an extra £55 for a £5000 transfer.
It’s a similar story with the 23-month Barclaycard. For a short window after Christmas, the balance transfer fee was reduced to 1.9%, but now you’ll have to pay at least 2.9% to make a transfer to this card.
Don’t despair
Still, there’s no need to despair just yet. It’s still possible to get a nice, long 0% period for a low fee. And for many people, the Lloyds TSB Platinum MasterCard will be the most attractive option.
If you transfer your existing card debt to this card, you won’t have to pay any interest for 21 months and the fee will be just 1.5%. So if your debt is £5000, you’ll be able to pay off the debt in full if you pay £270 a month for 21 months.
Your fee will be only £75 and you’ll save £811 in interest when compared to a normal card charging 17.9% in interest.
So let’s see how the Lloyds TSB card compares with the other leading cards with long 0% periods.
Top 0% cards with long interest-free periods
Card | 0% period | Balance Transfer Fee | Fee paid on £2000 transfer | Representative APR after 0% period ends | |
24 months | 3.2% | £64 | 17.9% | ||
23 months | 3.2% (falls to 2.9% if you transfer £2000+) | £58 | 17.9% | ||
23 months | 2.85% | £57 | 16.9% | ||
23 months | 3% | £60 | 18.9% | ||
23 months | 3.5% | £70 | 17.9% | ||
23 months | 3.5% | £70 | 17.9% | ||
HSBC Visa (existing customers only) | 23 months | 3.3% | £66 | ||
22 months | 2.9% | £58 | 16.9% | ||
21 months | 3% | £60 | 16.9% | ||
21 months | 1.5% | £30 | 17.9% | Apply for card before 23rd Feb to qualify for 1.5% fee. Must make transfer by 23rd March |
Unless you think you’ll need longer than 21 months to pay off your debt, the Lloyds card is clearly the best of the bunch because its balance transfer fee is so low at 1.5%.
In fact, the fee is so low, the Lloyds card looks attractive when compared to the ‘low fee’ balance transfer cards that offer shorter 0% periods.
Top low-fee balance transfer cards
Card | 0% balance transfer period | Balance transfer fee | Fee paid on £2000 transfer | Representative APR after 0% period ends | Notes |
12 months | 0.9% | £18 | 19.9% | Difference between previous balance transfer fee of 1.2% and 0.9% as a refund | |
13 months | 1% | £20 | 17.9% | ||
13 months | 1% | £20 | 17.9% | ||
15 months | 1.5% | £30 | 15.9% | ||
Barclaycard Platinum Low Balance Transfer Fee | 16 months | 1.5% | £30 | 18.9% | |
18 months | 1.5% | £30 | 17.9% | Apply for the card before 23rd February and qualify for 50% transfer fee refund, taking fee down to 1.5% | |
20 months | 1.55% | £31 | 15.9% | 50% refund on transfer fee, taking fee down to 1.55% | |
21 months | 1.5% | £30 | 17.9% | Apply for card before 23rd Feb to qualify for 1.5% fee. Must make transfer by 23rd March |
You can see from the table that the 12-month low-fee Barclaycard has the lowest fee at 0.9% and offers a 12-month interest-free period. But the Lloyds TSB Platinum card offers a 0% period that lasts nine months longer and the fee is only 0.6% higher at 1.5%.
Deadlines
If you’re tempted by the Lloyds card, you need to apply for the card by February 23rd. And once you have the card, you must make the transfer by March 23rd. Otherwise you won’t qualify for the 1.5% fee offer.
Given that January is traditionally such a competitive time in the credit card market, we may not see such an attractive 0% deal for the rest of 2013. It’s not just the Lloyds deal that will disappear. The Bank of Scotland will increase the fee for its Platinum Online MasterCard on February 23rd, and we wouldn’t be surprised if some of the other top deals were withdrawn over the next couple of months. After all, the reduced fees on the 24 and 23-month Barclaycards didn’t last long.
So if you’ve been meaning to do a 0% transfer, get cracking and apply now. If you delay, you may find that the best deals have gone when you do get around to applying.
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2Comments
10/01/2013 18:06
Or........to make it simpler.............If you haven't got it in yer pocket.............what's the point.
Banks are not there for you. They're there to use your money to make their money.
Most people would earn better interest going down the high street after chucking out time and picking up dropped loose change off the pavement.
10/01/2013 19:39
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