Abbey Zero no fees for balance transfers, foreign exchange or cash

Abbey has thrown down another challenge to the credit card industry with the launch of its new ‘Zero' card. It is the first ever card to offer no balance transfer fee, no foreign exchange fee and no cash advance fee on the same card.

Normally Abbey's foreign exchange fee is 2.75 per cent and its balance transfer and cash advance fees are 2.5 per cent or a minimum of £3. However, on Zero, these fees are waived. In addition, the card offers an introductory six-month interest free period on balance transfers and purchases.

Roger Lovering, Managing Director of Abbey Credit Cards, said: "We promised the market that we would continue to innovate and that is exactly what we've done. The Abbey Zero card is the first ever card to eliminate all these fees at once.

"With no balance transfer fee and six months interest free, it's the perfect card to transfer a debt you want to pay off quickly and has clear advantages for the summer too. No foreign exchange fee makes holiday spending less expensive and Zero also has no cash advance fee for those rare times you might need cash in an emergency."

Existing customers with the current Abbey card will also benefit with foreign exchange fees automatically lifted for the holiday period, from 1 June until the end of August.

Other features of the Zero card include:

18.9 per cent APR on all purchases (after the introductory 6 months interest free period)
25.9 per cent APR on cash advances (calculated from the day of withdrawal)
Fees for late payments, exceeding the credit limit, returned cheques and returned direct debits will still apply and are £12.

Roger Lovering continued: "Abbey Zero is the only one of its kind and it's not just an acquisition offer - the fee-free offering applies on an ongoing basis on this card - and we're extending the fee-free foreign exchange to existing customers for summer too. What's more, it won't stop there - our ambition is to ‘think differently' and so existing and new customers can expect to see more innovation from us later in the year."

Michelle Slade of Moneyfacts, said: "The launch of this card is fantastic news for consumers. Not only will those looking for a short-term balance transfer deal benefit but also those who are about to embark on their summer holiday. In a world where rates and charges are increasing on credit cards its good to see a lender bucking the trend and removing some of these charges."

A spokesperson for MoneyExpert.com said: "This is the only card on the market which won't penalise you for taking out cash abroad and could be a valuable addition for holidaymakers. The interest free credit on purchases will also mean you can stave off the interest bills from your holiday until Christmas if you splash out while on holiday."

David Kuo, Head of Personal Finance at Fool.co.uk, said: "Abbey has thrown down the gauntlet with its new Zero card. Other credit-card providers will now need to lick the tops of their pencils to come up with something to match. With its fee-free 0% balance-transfer deal for six months Zero will give consumers half a year's welcome breathing space from the credit crunch."

Abbey brought its credit card business back in house last year and the Abbey Zero card is its second major innovation since then. The first was the popular five per cent supermarket cashback deal which launched in September and is due to run until the end of July. Beyond that, existing Abbey customers can expect to see more innovation as the business follows the trend set by its parent company Santander. Abbey's credit card business is growing quickly and currently has 450,000 customers.