The battle of the balance transfer is hotting up again
Earlier this week Sainsbury’s and Tesco increased their 0% balance transfer deals to 33 months – matching Barclaycard’s 33 month offer.
But Barclaycard has retaliated by launching its 34 month interest free balance transfer Platinum Visa card – which has a balance transfer fee of 2.99% - initially 3.5% is paid, with the remainder refunded after the transfer. It also increased the interest free period on its current 32 month balance transfer card, to 33 months interest free – with a balance transfer fee of 2.79%
That means that if a customer transfers debt from another credit card within 90 days of receiving the 34 month 0% interest card, then they can get the equivalent of an interest free loan for over two and a half years. It has a representative APR of 18.9% and interest free shopping for 6 months.
Therefore on a balance transfer of £1000, the customer would pay around £30 transfer fee, and around £189 interest a year, once the 0% interest deal has lapsed.
Matt Sanders, Gocompare.com’s credit card spokesman, said: “This tit for tat battle of the top of the balance transfer table is great for customers – these are great deals and are unprecedented in the credit card market.
“But there are lots of good credit card deals available at the moment, so it’s worth taking the time to find those that are best for you and your circumstances.”
The Barclaycard 33 month balance transfer card has a 2.79% fee – again, initially 3.5% is paid, with the remainder refunded after the transfer. It also offers interest free shopping for six months, has a representative APR of 18.9%. Again, on a £1000 balance, once the interest free period has run out, a customer would pay annual interest of around £189, and the balance transfer fee would be around £28.
Bank of Scotland has a 24 month interest free balance transfer card on the market at the moment with a 1.5% transfer fee at a representative APR of 17.9%. It also has 0% interest free on purchases for three months. Therefore, if a customer transferred a balance of £1000 onto this credit card they would pay £15, and after the interest free period has lapsed the card holder would pay £179 interest annually.
Matt added: “Whatever card you apply for it’s important that you plan a way to pay off the balance. An interest free introductory offer sounds great, but it is still a debt that will have to be paid off. Make sure you have worked out an affordable way to pay, then you won’t fall foul of dropping out of the 0% interest period and end up paying interest on your existing debts.
“Examine the comparison tables and shop around for the best deal for you – with such a varied choice in the balance transfer market there is no need for customers to stick to the same credit card. Use these deals to your advantage to pay off your debts.”