There has never been a better time to get a credit card
Credit card providers are competing like crazy to offer the best deals to new borrowers.
There's a credit card war going on, with card providers in fierce competition for new customers and pulling out all the stops in order to stay at the top of the tables.
That's great news for borrowers as it means there are some great deals around
Balance transfer cards
So far this year the balance transfer market has been extremely competitive with the two major players, Barclaycard and Halifax, going head-to-head to be the market leader.
Barclaycard sits triumphantly in the top spot with a 25-month 0% card and 2.9% fee, which it brought out last week.
Narrowly behind is another 25-month offering, this time from Halifax, with a slightly higher fee of 3%. These two offer the longest ever 0% balance transfer periods and are a good option for anyone wanting a break from expensive interest payments.
Next in line are several 24-month deals, Barclaycard being the cheapest with a 2.8% fee, followed by NatWest and RBS with a fee of 2.9%.
As these cards offer such a long interest-free period, they also have high fees, so before you apply for one you’ll need to work out how much extra you’ll be paying. For those cardholders looking for a cheaper fee, there are several specially designed low-fee options available but these have a much shorter 0% period.
Our comparison tables show the full spectrum but here I’ve rounded up the top five.
|
Card |
0% period |
Balance transfer fee |
Fee paid on £2,000 transfer |
Fee paid on £4,000 transfer |
|
25 months |
2.9% |
£58 |
£116 |
|
|
25 months |
3% |
£60 |
£120 |
|
|
24 months |
2.8% |
£56 |
£112 |
|
|
24 months |
2.9% |
£58 |
£116 |
|
|
24 months |
2.9% |
£58 |
£116 |
Credit cards with 0% purchase rate
Another interesting area of the credit card market is the 0% purchase deals.
The idea behind them is you don’t pay any interest on new purchases for a certain period, giving you a little breathing space.
The longest cards in this space come from Halifax at 17 months and Tesco at 16 months. These cards also offer six and nine months balance transfer periods respectively.
Here, you can see the top-rating cards in the 0% purchase area.
|
Card |
0% purchase period |
0% balance transfer period |
Balance transfer fee |
APR |
|
Halifax Purchase Credit Card |
17 months |
6 months |
3% |
16.9% |
|
16 months |
9 months |
2.9% |
16.9% |
|
|
15 months |
12 months |
2.9% |
16.9% |
|
|
15 months |
15 months |
3% |
17.9% |
|
|
14 months |
14 months |
2.9% |
18.9% |
A word of warning
The market-leading cards on offer will only be available to people with an excellent credit history and often have conditions attached. If you get the new 25-month Barclaycard for example, you can’t transfer over an existing balance from another Barclaycard.
The penalties are also pretty strict with these cards if you miss a payment or go over your limit, so make sure you avoid this otherwise the 0% period could be shortened.
It’s also really important to clear the debt before the 0% period ends. There’s always the chance of switching the debt onto a new 0% card, but it’s a dangerous game as there’s no guarantee you’ll be accepted.
What else is on offer?
There are also reward and cashback cards to look out for which can pay you bonuses every time you spend on them.
The Lloyds TSB Duo Avios card, for example, pays one Avios point for every £1 spent and you could get an 18,000 Avios voucher if you spend £500 a month for the first three months (conditions apply).
When it comes to cashback there are also some attractive deals around. Barclaycard, for example, pays 6% in the first three months (capped at £120) while American Express offers 5% in the first three months (up to £100).
More on credit cards:
How to build an excellent credit history
The best reward credit cards
The best money transfer credit cards
Why cash and credit cards don't mix!
The best 0% purchase credit cards
Debit cards vs credit cards
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