Halifax launches new fee-free balance transfer credit card
Image: David Jones
Halifax has launched a new credit card with a 2.9% rate for 16 months - and no fee. But does it beat the interest-free deals?
There's a catch. There's always a catch - especially when it comes to interest-free credit cards.
Zero-rate periods have been gradually expanding on balance transfer cards over the last few years. However, as these terms have grown, so have the attached fees.
But Halifax has now broken ranks, unveiling a zero-fee card with a long and low interest rate.
Clarity card
New customers transferring their balance to Halifax's Clarity Card will pay just 2.9% APR interest for 16 months, with no balance transfer fee. After the 16 months are up the rate will revert to a relatively reasonable 12.9% APR (variable). The deal has no cash withdrawal fees, foreign exchange fees or annual membership fees.
A monthly cashback rate of £5 is also up for grabs if you have your main account with Halifax and spend £300 on the Clarity Card throughout each statement period. On top of that you'll get £5 back for every £500 balance transferred up to 19 February - to a maximum of £40.
That's in addition to the £5 per month you'll receive if you hold a Halifax Reward Current Account and pay in £1,000 every month. Throw in the £100 switching bonus and you could be looking at £260 cash over the full year if you move over to Halifax's Reward Account and Clarity Card and meet all three funding requirements.
But then again if you did do this, you would end up with almost £8,000 on your credit card across both purchases and balance transfers over the year. And remember, the purchase part of the card has no promotional rate, meaning you'll be charged at 12.9%. Ask yourself: do you want the cashback that much?
It's also worth noting that you can still get hold of the Clarity Card without a current account - but you won't earn the rewards.
So how does this card stack up against the regular 0% deals?
Interest-free cards
Let's assume that you take out a Clarity Card solely for its balance transfer feature. If you shifted £1,500 of debt to the card and cleared the whole balance in 16 monthly payments you would end up paying £31 of interest with monthly repayments of £95.69. This takes into account the fact that you'll be paying down the balance each month and hence the interest charges will gradually shrink.
On the 0% card side, the longest deal is HSBC's 23-month zero-interest account. However, this comes with a 3.3% fee that is applied to the whole balance when you make the transfer. So if you shifted £1,500 onto this card you'd pay a fee of £49.50 - £18.50 more than the total interest charge on the Halifax deal. The plus side of the HSBC card is that you'll have an extra seven months to clear the balance, bringing repayments down to £65.21 per month.
Conversely, if you took a further seven months on the Clarity Card to pay off your debt you would be hit with a 12.9% rate. On a remaining £500 balance cleared over seven months this would amount to £21.73 of interest.
Put simply: the HSBC card gives you longer to clear the debt, but you'll pay a premium for the privilege.
Here's a rundown of the next best interest-free balance transfer cards, along with the monthly repayments and fees for £1,500 debt cleared in full across the promotional period. I've included the Clarity Card repayments and interest charge as well.
| Card | Balance transfer offer | Cost/Fee | Monthly repayments | Reverts to APR |
|---|---|---|---|---|
| Halifax Clarity | 2.9% for 16 months | £31 (of interest) | £95.69 | 12.9% |
| HSBC Visa | 0% for 23 months | £49.50 (3.3% fee) | £65.21 | 17.9% |
| Barclaycard Platinum Visa | 0% for 22 months | £43.50 (2.9% fee) | £68.18 | 17.5% |
| Halifax MasterCard | 0% for 22 months | £52.50 (3.5% fee) | £68.18 | 17.9% |
| Barclaycard Platinum Visa (low fee) | 0% for 21 months | £39 (2.6% fee - refund back from 2.9% initially) | £71.42 | 17.9% |
So as you can see, the card you should go for really depends on how long you need to clear your balance. If you can shift it in 16 months then the Halifax Clarity is a good bet. But if you need a little longer and have less to spend on monthly repayments, one of the 0% cards may be a better choice - but you will pay a higher charge.
It's also worth noting that providers do not let you shift balances between their own cards. So if you already have a stack of debt on a Halifax credit card, you'll need to opt for a different lender's balance transfer deal.
Whatever you do, make sure that the balance is wiped out before the promotional period comes to an end. The last thing you want is to get stuck in a cycle of pricey interest payments. Balance transfer cards can be a good way to eat up debt and store it at 0% - but only if used properly. Remember, there's always a catch.
DO NOT TAKE OUT CREDIT, IF YOU CAN,T SEE ITS A SCAM NOW THEN YOU NEVER WILL.
CREDIT CARDS ARE USED WRONGLY IN THE UK ANYWAY, NOW ITS LIKE THEY USE THEM EVEN WHEN THEY ARE IN DEBT UP TO THERE EYE BALLS, LIKE I HAVE ALWAYS SAID THIS MODERN DAY GENERATION HAS NO SELF CONTROL OR EVEN TAKE THE TIME TO SEE IT CLEARLY IN THERE HUMAN BRAINS WHAT SELF CONTROL ACTUALLY IS, YOU HAVE BEEN MANIPULATED SINCE THE COMING OF TONY BLAIR, WHEN WILL YOU WAKE UP.
When will you people learn this is how goverments operate, the devil with the smile. Credit was used against you as it is policy of words at the end of the day, a contract if you will. But credit is only a short mini loan think about it.
I dont trust banks at all, for instance they lied about Payment Protection Plan, i could,nt use mine when i lost my job, so you can understand when i said so what they hell am i paying you for then. But i started to realise a pattern of greed a long time ago, but the question is why has all this greed been allowed to happen, are you really telling me with all the mightly milatary and secret service agencies and amazng inventions we have invented are you really saying they never saw the recession coming, TOTAL LIES, there is more to this recession they are not telling us, something has been covered up. I know longer trust England, its massively built on lies these days, a once beautiful country brought down by Tony Blair and his stupid decissions, and he is only human being like me and you.
Sitting back smoking my cig and drinking my booze, you dont like it, hey hey hey well now you know how we feel don,t you. There is a lot of Angry people in the uk, and the bubble is close to bursting, we have had enough of lies and manipulation in business, your creating a rotten life of lies.
