uSwitch.com: re-launch of the Halifax One credit card

Following the re-launch of the Halifax One credit card which now includes a 0% anniversary offer, Mike Naylor, Personal Finance Expert at independent price comparison and switching service uSwitch.com, finds a slight sting in the tail:

“The ‘new look’ Halifax One credit card is one of a dying breed of cards which offers 0% on both balance transfers and new purchases for a full nine months. Unusually, this card also offers a second 0% balance transfer deal on the 12 month anniversary of the card for a further six months. Although this is a great deal for consumers, this card does carry a higher purchase APR of 13.9% APR compared to just 9.9% APR on the Halifax One card which is currently available online ‘for a limited period’.

“The new Halifax One card isn’t available online but in branches and on the phone only. In order for consumers to get the maximum financial benefit from this card, they must clear the entire balance of transfers and purchases by the end of the nine month introductory period and make no further purchases. This will ensure that the money saved on anniversary balance transfers at 0% will not be wiped out by interest charged on purchases.

“Cards offering 0% on balance transfers and purchases for nine months (also available from Natwest and Royal Bank of Scotland) are far more beneficial for consumers than the growing trend of cards that offer 0% on balance transfers for nine months and just three months on new purchases. These latter deals should be treated with caution as it’s a clear case of ‘all that glitters is not gold’. Although these cards are really good for balance transfers, due to the ‘order of repayments’, they shouldn’t be used to make purchases as well.

“If a balance is transferred and purchases are made as well, the interest charged on these new purchases after the three month 0% deal expires will wipe out the interest saved on the balance transferred. For example, a 13 month 0% balance transfer deal on the average balance transfer of £1812 should have saved the consumer around £220.01 in interest. However, due to the order of repayments, purchases of £3000 would end up costing £368.12 in interest and will completely wipe out the interest saved on the 0% balance transfer. It makes much more sense to use two cards - one for balance transfers and one for new purchases. For example HSBC has just launched a 12 month 0% deal for new purchases and Barclaycard offers a 13 month 0% deal for balance transfers.”


Naylor concludes: “The credit card market can be a complex place so consumers should shop around to make sure they get the right deal for their individual needs. The days of a ‘one credit card fits all deal’ are over and people must ensure they use each of their credit cards for the right purpose or by having more than one if necessary. Getting the right card could save £220.01 in interest on the average balance transfer alone so it’s definitely worth doing.”