The battle for the second-best credit card
Fierce competition for second spot in best buy tables.
The balance transfer battle continues, with a trio of credit card providers striving to offer the second best balance transfer credit card.
Yes you read that right, second best. Nobody seems to be interested in challenging Barclaycard’s longest balance transfer offer, which boasts an incredible 33 months free from interest. Instead, the biggest competition is for the card that comes after that in the best buy tables.
Both Barclaycard and Halifax have 32-month 0% credit cards, and this week they have each cut the balance transfer fee charged. Both cards initially charge a 3% transfer fee, but you then get a portion of that fee refunded. With Barclaycard the fee falls to 2.68%, but with Halifax the fee drops to 2.65%.
Add to that MBNA launching its own 32-month 0% card, joining Lloyds, Bank of Scotland and Tesco, and it’s clear to see that this is where the providers are really doing battle, and potentially where borrowers can most benefit.
Let’s take a look at those 32-month 0% deals in a little more detail:
|
Credit card |
0% period on balance transfers |
Balance transfer fee |
Fee charged on £2,000 transfer |
Representative APR |
|
32 months |
2.65% |
£53 |
18.9% |
|
|
32 months |
2.68% |
£53.60 |
18.9% |
|
|
32 months |
2.69% |
£53.80 |
18.9% |
|
|
32 months |
2.8% |
£56 |
18.9% |
|
|
32 months |
2.8% |
£56 |
18.9% |
|
|
32 months |
2.9% |
£58 |
18.9% |
That’s six different cards all offering 32 months free from interest on the balance you shift over. And while the difference in transfer fee is relatively small when you’re shifting over £2,000 – just £5 difference between the Halifax and Tesco cards – that difference soon starts to jump up when you’re moving over more significant sums of money.
Clearing your debt quicker
32 months is a very long time though. If you don’t need quite such a long 0% period in which to clear your debt, then you can save cash by going for a card with a shorter interest-free offer, but a smaller balance transfer fee too.
For example, clear your debt in 30 months and the Halifax 30-Month Balance Transfer Card will only charge you 2.5% to move your debt over. If you can clear it in 28 months, then you could benefit from a transfer fee of just 1.5% with cards from Lloyds Bank, Halifax and Bank of Scotland.
If you can clear that debt in 15 months then you could get a fee as low as 0.55% from Nationwide, though you need to be a current account holder to get the Select Low Balance Transfer Fee card. If you don’t want to switch your bank account, Nationwide is still your best bet at 0.65% with its Low Balance Transfer Fee card.
If you can clear your debt in 10 months, then you don’t have a pay a transfer fee at all thanks to the Tesco Bank Clubcard No Balance Transfer Fee Credit Card.
Clearly, while the battle is hotting up for the second spot in the best buy tables, there are even better deals for some borrowers when you move beyond the headline balance transfer credit cards.
More on borrowing:
The best balance transfer credit cards
The best cashback credit cards
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