Average 0% period on credit cards at new highs

Interest-free deals are getting more competitive.

There’s never been a better time to get a 0% purchase or 0% balance transfer credit card, according to new figures.

The latest Moneyfacts UK Credit Card Trends report shows introductory interest-free periods on balance transfer and purchase credit cards have reached new highs over the quarter.

It says the competition between lenders has also helped to drive down the cost of borrowing with average balance transfer fees dropping over the same period.

0% purchase deals

The average introductory term on 0% purchase cards in the market increased by nine days from December 2014 to stand at a new record of 260 days.

The very best 0% purchase card on the market, the Santander 123 Credit Card, now offers nearly two years interest-free on shopping.

Here are the longest 0% periods on offer right now for new purchases.

Credit card	0% period on purchases	Representative APR
Santander 123 Credit Card*	23 months	16.5%
Clydesdale Bank Gold MasterCard	20 months	18.9%
Yorkshire Bank Gold MasterCard	20 months	18.9%
Halifax Purchase Credit Card	20 months	18.9%
Tesco Clubcard for Purchases	19 months	18.9%
M&S Credit Card	19 months	18.9%
Lloyds Bank 19-Month Platinum	19 months	18.9%
Bank of Scotland 19-Month Purchase	19 months	18.9%

*Annual fee of £24

Compare the best 0% purchase credit cards

0% balance transfer deals

The average 0% balance transfer term has increased by 20 days quarter-on-quarter, reaching a new record of 491 days.

Barclaycard launched a 0% deal lasting 36 months in this period, the longest ever seen, which has helped boost competition and encourage other providers to make similar moves. See: Lenders scrap for top 0% balance transfer credit card honours for more.

Below are the top cards with the longest 0% period on balance transfers.

Credit card	0% period on balance transfers	Balance transfer fee	Fee paid on £2,000 transfer	Representative APR
Barclaycard 36-Month Platinum Visa	36 months	2.99%	£59.80	18.9%
Virgin Money Balance Transfer Credit Card	36 months	3.49%	£69.80	18.9%
Barclaycard 35-Month Balance Transfer Credit Card	35 months	2.79%	£55.80	18.9%
Halifax 35-Month Balance Transfer Credit Card	35 months	2.8%	£56	18.9%
Lloyds Bank Platinum 35-Month Balance Transfer Credit Card	35 months	3%	£60	18.9%
Bank of Scotland Platinum 35-Month Balance Transfer Credit Card	35 months	3%	£60	18.9%
Tesco Bank Clubcard 34-Month Balance Transfer Credit Card	34 months	2.90%	£58	18.9%
HSBC Credit Card	34 months	3.3%	£66	18.9%

Compare the best 0% balance transfer deals

Cost of borrowing getting cheaper

At the same time, Moneyfacts reports the average balance transfer fee has fallen 0.08% quarter-on-quarter to stand at 2.36%.

This shows that providers are genuinely cutting the cost of borrowing.

If you are willing to sacrifice the length of your 0% period there are some very cheap and even free 0% balance transfers out there. Below are the top deals witha fee of 1.25% or less.

Credit card	0% period on balance transfers	Balance transfer fee	Fee paid on £2,000 transfer	Representative APR
Santander 123 Credit Card*	23 months	None	£0	16.5%
Santander Credit Card	15 months	None	£0	18.9%
Halifax 0% Balance Transfer Fee Offer MasterCard	13 months	None	£0	18.9%
Tesco Clubcard with No Balance Transfer Fee	12 months	None	£0	18.9%
Nationwide Select Low Balance Transfer Fee Credit Card**	15 months	0.25%	£5	15.9%
Nationwide Low Balance Transfer Fee Credit Card	15 months	0.35%	£7	17.9%
Post Office Platinum Credit Card	18 months	0.79%	£15.80	17.8%
Halifax All in One Credit Card	19 months	1%	£20	18.9%
Virgin Money Balance Transfer Credit Card	26 months	1.25%	£25	18.9%
Bank of Scotland Platinum Balance Transfer Credit Card	28 months	1.50%	£30	18.9%
Halifax Platinum Balance Transfer Credit Card	28 months	1.50%	£30	18.9%
Lloyds Bank Platinum Balance Transfer Credit Card	28 months	1.50%	£30	18.9%

*£24 annual fee

**Nationwide current account customers only

Compare low-fee 0% balance transfer credit cards

More on banking and borrowing:

Supermarket credit cards vs. cashback credit cards

The challenger banks fighting back against the high street giants

Clydesdale and Yorkshire Banks relaunch £150 switching offer