Barclaycard is offering the longest 0% balance transfer deal on the market, as well as offering a partial refund on your transfer fee – for a limited time only!
In the build up to Christmas, the balance transfer credit card market is getting hotter. Last month NatWest and RBS upped the ante and launched a credit card offering interest-free balance transfers for 23 months.
This was in line with the offering from Barclaycard and as expected, Barclaycard has now hit back and increased the interest-free period on its Platinum Extended Balance Transfer card from 23 months to 24 months to ensure it stays ahead of the game and tops the tables.
How to benefit from balance transfer cards
If you’ve been doing a lot of spending in the run up to Christmas and you’ve whacked a fair chunk of this on your credit card, you may be bracing yourself for a hefty credit card bill at the end of the month. But if you’re paying interest on that debt, it’s well worth moving it over to a 0% balance transfer card so you won’t have to pay any interest on your debt for a set period. With the Barclaycard Platinum Extended Balance Transfer card, you now won’t need to pay any interest on your debt for two years.
If you’re thinking you’ll wait until the New Year to sort out your finances, think again. It can take several weeks for your credit card application to go through so it actually makes far more sense to apply for the card now. What’s more, if you leave it until January, you’ll miss out in a big way on cuts in the transfer fee.
That’s because Barclaycard has reduced the transfer fee on the card to 2.8% from the previous 3.2%, meaning if you were transferring a balance of £3,000, you’d pay £84 now compared to £96 next year. Plus, transfer a balance of £2,000 or more before 6 December and you’ll receive a £30 fee refund. So on a balance of £3,000, your total transfer fee would now be £54. That’s a total saving of £42. The message is don’t delay!
Do bear in mind that you’ll need to transfer your balance within 60 days of opening the account to get the £30 refund.
But Barclaycard doesn’t stop there as it is also offering a 23-month 0% balance transfer deal with an even lower fee of 2.6%, which has also been reduced from 3.2%. The £30 refund also applies to this card providing you’re transferring £2,000 or more. This means on a balance of £3,000 your fee will be £48.
This is far lower than the fee you’d pay with the RBS and NatWest 23-month 0% balance transfer cards. Here, the fee is 3.5%, so on a balance of £3,000 you’d pay £105 – more than double the fee on the Barclaycard!
Alternatively, the Tesco Clubcard credit card for balance transfers offers an interest-free period for 22 months with a fee of 2.9%, the Halifax credit cardhas 0% balance transfers for 22 months with a 3% fee and NatWest and RBSalso offer 22-month options with a fee of 3.2%.
MBNA has also joined the club by launching a 22-month balance transfer card with a 2.85% transfer fee.
Even lower fees
Some 0% balance transfer cards offer even lower transfer fees. For example, the Barclaycard Lowest Balance Transfer Fee card offers 12 months interest-free on balance transfers and has reduced the transfer fee from 1.2% to 0.9%. On a debt of £3,000, that would come to £27. Note that the £30 refund offer isn’t available on this card.
Alternatively, the NatWest Platinum Low Balance Transfer Fee credit cardoffers 13 months interest-free and has a fee of 1%. Barclaycard has yet another option with its Platinum Balance Transfer Card with Low Fee which offers 16 months at 0% and has a 1.5% fee. Or the MBNA Everyday Credit Card offers 17 months interest-free and has a fee of 2%.
Which one should I choose?
If you’re feeling completely confused and don’t know which card to go for, I don’t blame you. But there are a number of factors to take into account when making your decision.
Firstly, you can’t transfer a balance from one provider’s card to another card with that same provider. So if you have a Barclaycard already, you can’t move the balance across to another Barclaycard.
Secondly, you need to have a top-notch credit rating in order to be accepted for the most competitive credit cards. If you don’t, you may be better off going for a card slightly further down the best buy tables.
And thirdly, you need to think about how much debt you have to clear and how long it will take to pay off. If you don’t clear it before the end of the 0% period, you’ll start paying interest. Either that or you’ll need to move your money to another 0% balance transfer card and pay another transfer fee.
If your debt is large, you’ll want to pay as low a fee as possible. But at the same time, because you have a larger debt to pay off, you’ll probably need longer in which to do so. The only way to solve this matter is to do the maths.
For example, if you transferred £3,000 onto the Barclaycard Platinum Extended Balance Transfer card, your total debt including the fee would be £3,054. This would mean you’d need to pay off £127.25 a month to clear your debt before the 24 months were up.
But if you transferred the same amount to the Barclaycard Lowest Balance Transfer Fee card instead, your total debt would be £3,027 – a saving of £27. But you’d need to pay off £252.25 a month in order to clear your balance within 12 months. If you think you can find an extra £125 a month, this is the option to go for. If you can’t find the extra £125 a month, go for the 24-month option.