The top balance transfer credit cards

Here are the four top cards for repaying your debt as quickly and cheaply as possible, with the two winners coming from the same bank.

For each pound you pay on a credit card in debt interest, you will be one pound poorer for the rest of your life. No matter how much you earn, you won't get it back. If your twin earns the same as you, but never borrows, she will always be a pound richer for each pound of interest you pay. And most credit card holders pay lots of pounds at hideous interest rates.

That's why it makes sense to pay off your debt as quickly as possible at the lowest possible cost. You keep more pounds for yourself that way. You can do this by moving your debt around.

The longest deal on the market

Barclaycard currently has both of the top deals for transferring existing debts at the lowest overall cost.

The first is with the Barclaycard with 20 Month BT Visa Card, which is the longest deal on the market at 20 months interest-free, with a 3.2% fee. That's bags of time to pay down large amounts of debt while saving probably hundreds in interest for each £1,000 on your card. The total cost with this Barclaycard is fixed and certain at just £32 per £1,000 of debt for a full 20 months.

If you pay off the debt in equal instalments and need the whole 20 months, this will work out at the equivalent annual interest rate of 3.7% (which is basically for these purposes the APR). That is higher than the fee, because the fee is paid up front on the whole amount, whereas if you were just paying interest it would be a small piece of interest each month on a (hopefully) shrinking amount.

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Why is converting the fee to an annual interest rate useful? Firstly, because it makes comparisons with a card charging 6.9% APR easier. You can compare the rates to know which is more expensive.

Secondly, it helps you see at a glance whether a 20-month deal with a 3.2% fee is a better bargain than a (shorter) 18-month deal with a (cheaper) 2.9% fee.

Same thing, shorter version

There are three 18-month deals for a 2.9%* fee that are currently available. These are the MBNA 18 Month Visa Card, the Virgin Money Credit Master Card (Virgin is in the MBNA group) and another Barclaycard, the Barclaycard 18 Month Platinum Visa Card.

Although in fee terms these three are cheaper than the first Barclaycard, the deal is shorter and therefore less valuable. So, if I again express the fee in terms of an annual interest rate, and again assume you pay off the debt in equal instalments – these again come to 3.7% effective APR. This means these cards are equally valuable to Barclaycard's longer deal with the higher fee. That is probably no coincidence, and the card providers are, I'm sure, aware of this.

That said, if you don't want to pay in equal instalments and just intend to clear your debt earlier and as quickly as possible, these shorter deals with lower fees will work out better for you personally.

Interestingly, all three of these cards have contactless technology: you can pay for things up to £15 by holding the card up to a reader in shops. Make sure you don't get carried away with impulse buying!

Barclaycard wins again

Those are three words I don't write very often but, of these three cards, Barclaycard has the edge, in my opinion, for three reasons.

Firstly, the order in which it repays your various debts, such as purchases or balance transfers, is more straightforward. I wrote about how each of these providers deal with this in Credit cards that bend the rules.

The gist is that you can make small purchases on the Barclaycard even while you have an outstanding balance transfer, safe in the knowledge that you won't get charged interest at any time, so long as you pay off the purchase promptly. (Both Barclaycard credit cards have 0% on new purchases for three months – just make sure you clear the balance in full each month once this 0% period has expired.)

Secondly, both Barclaycards mentioned here offer a 1% reward at 20,000 retailers. Usually I wouldn't choose a card for its reward points, finding cashback to be better, but considering the number of retailers to choose from, including Shell and Pizza Express, this could well prove to be a nice bonus.

Thirdly, both the Barclaycards mentioned will reduce the fees on any second or further transfers you make. Barclaycard describes this as 25% off but, unless you're good at maths that probably sounds more generous than it actually is, because it doesn't mean you'll pay 25% less in fees.

Still, it does mean a small but welcome reduction in the total fees you pay.

Important points for all balance transfer cards

You can get hit with fines and bad marks on your credit record, or even have your 0% deals taken away from you, if you don't use your cards in a way that steers you from small-print booby traps. You should read the contract yourself, but here are two ways to avoid some of the bigger catches:

• Always make some sort of repayment each month, even if you're not being charged interest. Each card provider sets a minimum that you must repay. Don't worry, if you're on 0% interest, every pound of the repayment will go to reducing your debt.
• Pay off purchases promptly. It is best to pay off purchases within a month with these sorts of cards. Bear in mind that you could still be charged interest on purchases even then, albeit probably not much, and not at all with the Barclaycards.

*All fees are rounded to get rid of the pointless 2.88%s and 2.89%s!

More: Compare credit cards through lovemoney.com | The new market-leading all-round credit card | Eight tips to clear your credit-card debts