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Higher or lower - fees hold key to playing your cards right

4th February 2013 Print

More people looking for credit card balance transfer deals would prefer shorter term zero interest offers to longer term deals with higher fees, according to research for Nationwide Building Society.

One in five (20 per cent) credit card holders who would consider transferring their balance would be more likely to opt for a shorter-term 0 per cent interest deal with a lower balance transfer fee (around 1 per cent) on their new card.  This compares to 17 per cent who would choose a longer-term 0 per cent interest deal with a higher balance transfer fee (typically around 3 per cent).

Yet almost a third, 32 per cent, said they would be influenced by other factors, not the balance transfer fee or the term of the deal.

Credit card holders can opt to move their balances as a means of managing debt already built up, reducing interest payments over a specified period and saving money in the process. By minimising the fee on balance transfer arrangements, credit card holders could save substantial amounts of money.

Anyone now opening Nationwide Credit Card or Select Credit Card online will benefit from a 50 per cent discount on the balance transfer fee, reducing it to 1.55 per cent for the introductory offer of 20 months at 0 per cent interest on balances transferred within 3 months.

So, on a balance transfer of £3,000 and with 0% interest for 20 months, new Nationwide credit card holders would pay a fee of £46.50, compared with £90 for deals with a fee of 3 per cent.

Paul Carvell, Nationwide's head of credit cards, said: "More and more credit card holders are opting for a smaller fee over a longer term because it can save a considerable sum, but they are evidently also looking beyond the cost of fees or length of the zero interest term for a better all round deal.

"Nationwide offers the best of best worlds, with a lengthy, 20-month zero interest offer but with a reduced fee of 1.55 per cent.

"Other factors that card holders may consider when looking to transfer credit card balances to a new card include cashback offers, rewards such as commission free foreign transactions or shopping benefits, loyalty points and discounts and excellent customer service."

For more information, visit nationwide.co.uk.