New market-leading 0% balance transfer card

A big shake-up in the credit card market means there's a new market-leading, interest-free balance transfer card - but this is not the good news it appears to be...

New credit card rules have been announced by the government which could save customers millions of pounds. The new changes are due to come in by the end of next January at the latest.

Perhaps most importantly, the rules will see the ban of negative order of payment - a sneaky trick currently adopted by the majority of credit card providers, and one that we at lovemoney.com have been campaigning to be abolished for several months.

• Watch our video: Don’t get caught out by negative order of payment

What’s more, the new rules will also mean that customers in financial difficulty will no longer be offered an unsolicited credit limit increase. And anyone who is offered a limit increase will have a 30-day notice period in which he/she can opt out.

Those customers at risk of financial difficulties will also be given guidance on the consequences of paying back too little on their credit card. And finally, customers will also have a 60-day period in which they can reject a change to the interest rate on their existing debt.

What does this mean for me?

Here at lovemoney.com HQ, the ban on negative order of payment has certainly been a cause for celebration. After all, it’s a nasty trick that has been leaving thousands of credit card users out of pocket.

In a nutshell, negative order of payment means that your cheapest debts are paid off first, leaving your most expensive debts to rack up interest. So unless you’re aware of it – which many people aren’t - it can be very easy to get caught out and end up paying far more interest than you should be.

However, despite the ban, we’re not breaking out the champagne just yet. And that’s simply because for the more financially savvy among you – those of you who have never been caught out by this trick - the ban on negative order of payment may actually not be as good as it first appears.

As unfair as it sounds, negative order of payment has been a way for credit card providers to make money. And with the introduction of ‘positive’ order of payment, credit card providers will need to find new ways to bring in that cash.

As a result, it’s quite likely that over the coming months we will see fewer 0% balance transfer deals on the market, or at least, shorter interest-free periods. Standard interest rates may also start to rise.

• Adopt our goal: Pay off your credit card debts

Related goal

Pay off credit card debts

How to destroy your credit card debt quickly and effectively.

Do this goal

A new market-leader

As if proof were needed, as of today (Thursday 18 March), the interest-free period on the Virgin Money Credit Card has been lowered from a market-leading 16 months to just 14 months.

The Virgin Money Credit Card has been a major talking point at lovemoney.com for a long time, simply because it has been at the top of its game for many many months. But as of today, it's all change.

Virgin is no longer the market-leader. Instead, Barclaycard Platinum Visa now offers the longest 0% balance transfer period, as its deal lasts for 15 months.

The best balance transfer credit cards

Unfortunately, now that Virgin Money has cut its 0% balance transfer period, other credit card providers are likely to soon follow suit. And that means that if you’re thinking about applying for a new 0% balance transfer credit card, you should get in quick - before all the other top deals vanish.

The chart below highlights some of the top 0% balance transfer deals on the market right now.

*You need to be an existing current account customer to apply for this card.

So, as you can see, the Virgin Money Credit Card Mastercard has now slipped to sixth position, and has passed over the market-leading balance transfer card crown to the Barclaycard Platinum Visa, which is offering an interest-free period on all balance transfers for 15 months.

Similarly, the NatWest Platinum Card, Royal Bank of Scotland Platinum Card, HSBC Credit Card, and First Direct Gold Card, all offer 15 months interest-free on balance transfers. The typical APR on these cards is slightly higher than the Barclaycard Platinum Visa, however, at 16.9%. Just be warned that for the NatWest, RBS, and HSBC cards, you will need to be a current account customer to apply.

And until positive order of payment comes into effect (by the end of next January), make sure you avoid spending on these credit cards!

The best 0% purchases credit cards

If you are looking for a better way to spend on your credit card, and you know you won't be able to pay off your balance in full each month, you could consider a 0% new purchases credit card.

The chart below highlights the top 0% purchases credit cards.

*Applicants must be aged 50 or over.

In this case, the Tesco Clubcard Credit Card is the clear winner, offering 12 months interest-free on all new purchases. In fact, it’s such a good offer, I’ve just applied for it myself to help pay for my honeymoon!

That said, the Sainsbury’s Finance MasterCard also offers a tempting deal, with 0% interest on new purchases for 10 months. This credit card also neatly side-steps negative order of payment as it offers the same 10-month interest-free period on balance transfers and purchases, so your debts are treated equally. This means you can transfer a balance onto this card as well as spend on it, without worrying about getting caught out.

So if you’re looking for 0% deal on either balance transfers or purchases, make sure you get applying now! After all, who knows what the next few months will bring...

More: A new way to earn free money | The best loyalty schemes for shoppers