Generous introductory offers on balance transfer credit cards have been steadily re-emerging in the years since the credit crunch. With proper use they can provide the cheapest escape route for those resolved to clearing their debts.
Freedom: Balance transfer cards are a useful tool to help you get out of debt.
Switching your debts to a balance transfer card can speed up the repayment of debt because most, or all, of your repayment goes toward wiping out the balance and not paying interest. The best deals offer up to two years of 0 per cent interest in exchange for a switching charge.
Those with short to medium-term debts can use such offers to finally get out of the red, while those with much more to repay can look to these cards to provide a lower cost alternative to their existing debts.
But beware: there are caveats to consider and barriers to overcome when applying for such cards (see box).
Many balance transfer cards also come with a 0 per cent period for new purchases as well - card companies aren't providing cheap credit as a favour, they want you to spend more on the card and maintain that new debt, which is much more profitable for them.
Remember, you are trying to repay your debts, not build up more. So think hard before buying anything else with credit.
This is Money has compiled a selection of the best deals currently available in the balance transfer market.
This page is kept updated throughout the year - bookmark it for the very latest developments.
Longest interest-free period cards
Market leader:
The never-ending battle for the top spot of the best buy tables continues, as usual Barclaycard has recently increased its 0 per cent balance transfer period securing its leading position.
It now offers 32 months on its Platinum Extended balance transfer card - offering the longest interest free period on the market.
The credit card comes with a 3.5 per cent fee, which means you would pay £35 to transfer over £1,000 from other credit cards.
But if you transfer the balance within 60 days of opening the account you will receive a refund on your transfer fee, bringing it down to 2.99 per cent.
The money will be credited to your account after your balance transfer has been successfully completed.
You must have a salary of at least £20,000 to apply. Any amount you transfer must not exceed 90 per cent of the credit limit on the card. But you will be hit with 18.9 per cent interest after the introductory period ends.
Barclaycard has a second competitive product- its Platinum Balance Transfer card - which offers 30-months interest free and fees of 2.89 per cent after you get a refund from an initial 3.5 per cent fee.
BEST 0% BALANCE TRANSFERS
| Provider | Duration* | |
|---|---|---|
| 1 | Barclaycard | 32mnths |
| 2 | Barclaycard | 31mnths |
| 3 | Halifax | 31mnths |
| 4 | MBNA | 30mnths |
| 5 | Tesco Bank | 30mnths |
Halifax has recently upped its game with a Balance Transfer Credit Card which comes with 31 months interest free on balance transfers and a fee-free purchase period of six months.
But it costs a slightly more to make the transfer than the rest of the best-buy deals at three per cent. The standard interest rate is 18.9 per cent.
MBNA has a 30-month Platinum balance transfer card with a transfer fee of 2.89 per cent. If you want to make a money transfer to use for paying off an expensive overdraft or loan you will pay a 4 per cent handling fee.
The card offers three months interest-free on purchases as well, but after the introductory periods end interest on balance transfers and purchases shoots up to 18.9 per cent.
Tesco Bank's Clubcard Credit Card is offering 0 per cent for 30 months when you move debts across as well as three months of interest-free purchases.
The balance transfer fee is 2.9 per cent, which is not the lowest on the market, but you do also get Clubcard points on spending.
Customers receive Clubcard points on all their spending receiving one point for every £4 spent on their card. The Clubcard Credit Card also doubles as a Clubcard in Tesco stores allowing customers to earn five points for every £4 spent.
Find out more about how you can clock up Clubcard points on your credit card with This is Money's best credit card guide
RESTRICTIONS ON BALANCE TRANSFER CARDS
Being approved for a balance transfer card is by no means guaranteed.
In theory, those with the best credit ratings are the most likely to be approved for a card as they will have a history of paying off debt on time and have a stable income.
It is more probable that those with poor credit ratings will be rejected.
Those who are refused should bear in mind that applying for a number of other balance transfer cards in a short space of time will worsen their credit rating.
Many card providers will not allow you to transfer balances from another of its own products, so you should identify the best deal for you outside of your existing providers before making an application.
Some providers meanwhile may only accept your application if you already hold a current account with them.
There are other restrictions you will also have to satisfy, such as having a minimum level of income (generally £10,000-£20,000).
And to take advantage of introductory 0 per cent offers, you will have to transfer your balance within a specified time-frame.
Lowest handling fee cards
For those confident they can pay off their credit card debts in a short space of time, then getting a balance transfer card with a lower handling fee, but lower interest-free period, can limit the extra charges on your debt.
Competition is tight with the top four our five providers offering fees below one per cent and fairly decent balance transfer windows too.
Market leader:
Tesco Bank charges just 0.65 per cent to shift debts to its Clubcard Credit Card with low transfer fee.
It also offers 12 months interest free on balance transfers and puchases and a standard interest rate of 18.9 per cent.
Bank of Scotland and Lloyds Bank have released a Platinum Balance Transfer card offering 15 months interest free on balance transfers with a 0.7 per cent fee.
The card also comes with six months interest free on purchases and a standard interest rate of 17.9 per cent.
Nationwide is offering a slightly better deal though if you would rather pay a little more upfront for a longer interest free deal. Its gives 26-month interest-free but comes with a slightly higher transfer fee of 0.75 per cent, on two different credit card options.
Customers signed up to Nationwide’s FlexAccount, FlexDirect Account or FlexPlus Account can take out the Select Credit Card.
This comes with 0 per cent interest on purchases for 15 months. 0.5 per cent cashback on purchases and unlimited commission free purchases while overseas.
Alternatively, the deal also applies to the building society's Nationwide Credit Card, which is open to everybody. Sadly, however, it does not come with any cashback perks and the free interest on purchase only lasts three months.
Fluid also offers a 0.75 per cent fee. The Fluid card, issued by MBNA, however comes with a much lower interest-free term at just 12 months to pay off your debt.
Halifax All in one Credit Card comes in second with a fee of 0.8 per cent, but it has a longer 0 per cent balance transfer window than the fluid card at 15 months.
With this card you will have to pay an initial balance transfer fee of three per cent, before you are granted a 2.2 per cent refund.
Best low rate balance transfers
People who have racked up substantial credit card debt which is unlikely to be paid off within two years can plump for balance transfer cards which offer lower rates of interest.
However, those who are considering this option should seek advice as to whether there might be a better deal to be a had consolidating such debts into a loan, particularly with borrowing rates at record lows at the moment.
Market leader: Lloyds Bank and TSB
Lloyds Bank and TSB lead the pack offering table topping low-rate balance transfer deals.
Both offer Advance credit cards with interest on balance transfers of 4.9 per cent for the first 12 months. After that the rate reverts to the standard card rate of 11.9 per cent which is still significantly lower level of interest than typical credit cards.
You will pay a three per cent transfer fee and in order to get the introductory rate you will have to transfer your balance in the first 60 days.
The cards also come with six months 0 per cent interest on purchases.
Read more: http://www.dailymail.co.uk/money/cardsloans/article-2259601/The-best-balance-transfer-credit-cards-help-clear-debts.html#ixzz32zHQcn3m
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