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It's credit card war
It's credit card war
Three cracking new balance transfer deals were announced last week. Now is a great time to transfer your debt to a top quality 0% card.
The 0% credit card market is getting really competitive at the moment. Last week Tesco, Barclaycard and Lloyds all launched excellent new 0% offers, so which is the best one for you?
Let’s start with Tesco. The supermarket giant is now offering a 22-month 0% period on its Clubcard credit card for balance transfers. So if you have a big debt on your credit card, you could transfer it over to the Tesco card and not pay any interest for 22 months.
Yes, you’ll have to pay a balance transfer fee, but Tesco has slashed that fee from 3.95% to 2.9%, so you’ll now only pay £145 for a £5000 transfer rather than £197.50.
This is a very attractive deal. In fact, it’s so attractive that Barclaycard felt it had to fight back with some improved offers itself.
The Barclaycard 23 Month Platinum Visa card now comes with a 23-month interest-free period and a 2.8% fee. In other words, the 0% period is slightly longer than Tesco’s, and the fee is slightly lower. And if you go for the for shorter 22 Month Platinum Visa you’ll pay an even lower balance transfer fee at 2.6%.
You might think that Barclaycard is the obvious choice for most people, but I’m sure that a decent number of switchers will go for Tesco.
That’s partly because the Clubcard points offer is very appealing and partly because you can’t transfer debts from an existing Barclaycard to a new one. In other words, if you have a debt on a Barclaycard, you’ll have to transfer it to Tesco or another provider.
The final new offer comes from Lloyds. It’s a 50% refund on your balance transfer fee. So if you transfer your debt to a Lloyds TSB Platinum MasterCard, you’ll initially pay a 3% fee, but you’ll then get a refund 30 days after the balance transfer is completed. Transfers must be completed by 16th November to get the refund.
On the downside, the interest-free period is relatively short at 15 months, but if you’re confident you can pay off your debt in that time, it makes sense to go for a card with a lower fee.
Let’s now compare all the top 0% cards:
Top 0% balance transfer cards
|Credit card||0% |
|Balance transfer fee||Fee paid on £2000 transfer||Fee paid on £5000 transfer||Normal |
|Barclaycard 23 Mth Platinum Visa||23 months||2.8%||£56||£140||17.9%|
|Tesco Clubcard Credit Card for Balance Transfers||22 months||2.9%||£58||£145||16.9%||One clubcard point for every £4 spent on card.|
|Barclaycard 22 Mth Platinum Visa||22 months||2.6%||£52||£130||17.9%|
|Lloyds TSB Platinum MasterCard||15 months||1.5%||£30||£75||17.9%||50% refund on balance transfers over £1500 before 16th Nov.|
|Fluid card||15 months||1.5%||£30||£75||15.9%|
|HSBC Visa||23 months||3.3% fee||£66||£165||17.9%||HSBC current account customers only|
|Natwest Platinum||22 months||3.2% fee||£64||£160||17.9%|
|Halifax MasterCard||22 months||3.5% fee||£70||£175||17.9%|
|Halifax 20 Mth MasterCard||20 months||3% fee||£60||£150||16.9%|
There’s one more stand-out card in the table that we haven’t looked at yet. It’s the Fluid card. It’s actually very similar to Lloyds TSB card – a 1.5% fee for a 15-month 0% period.
In fact, for many folk, the Fluid and the Lloyds TSB cards are the best of the bunch. If you do a £5000 transfer with Tesco, you’ll pay a £145 fee, but with Fluid and Lloyds TSB, you’ll only have to pay £75. That’s a sizeable saving. What’s more, 15 months should be long enough for many folk to pay off their debt.
We’d only recommend the cards from Barclaycard and Tesco if you think you definitely won’t be able to pay off your debt in 15 months. If the Clubcard points appeal, you could always take that card out as well and use it for your spending.
That said, don’t succumb to the temptation to spend more than you can afford with your new piece of plastic.
0% cards are fantastic tools to help you pay off debt, but if you get carried away and spend more than you can afford, you’ll still have a debt problem when your 0% period expires. The only change will be that your debt problem has got even worse, not better.
It’s also worth pointing out that not everyone will be able to get a 0% card. If your credit rating is poor, the card providers probably won’t want to give you any more credit. So if your debts are too high and you can’t get a 0% card, you should consider phoning one of the freedebtcharities and getting some tips on how to sort things out.
But if you’ve got some debt and you can get a 0% card, go for it! It will save you a ton of money.
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