0% Cards With No Balance Transfer Fees

It is still possible to find a balance transfer card that doesn't charge a fee, but they're few and far between.

One thing we at The Fool are very keen on is getting a good deal from financial providers. Even better, we love it when we can make money from them - which would probably explain our love for the 0% credit card.

For anyone that doesn't know, there are essentially two types of 0% credit card. The first is the 0% card for new purchases, which does exactly what it says - take out one of these cards and you'll typically get up to a year to make purchases on the card, interest free. Provided you pay off the minimum amount each month without fail, you'll be able to squirrel away the rest of the money you've spent into a high interest savings account, and pay off the card in full when the 0% period expires. Any interest made is yours.

The second type, which can be even more lucrative, is the 0% card for balance transfers. Take out one of these cards and you'll be able to transfer the balance held on another credit card to it, and gain anything up to 14 months without having to pay any interest on your debt. With credit cards charging anything up to 25% APR, you can save a fortune in interest payments.

This can be a great way for those in debt to gain some breathing space. Then they can save up and pay off their balance in full. Alternatively, the canny will have already saved that money and stashed it into a high interest account, and will happily reap the interest until the balance must be paid off.

Now all was fine and dandy until a few years ago when the financial providers introduced capped balance transfer fees (typically 2% of the balance transferred) in an effort to claw back some of the savings we were making from the 0% balance transfer cards. Now practically all 0% cards charge a balance transfer fee - and many are no longer capped. Transfer £5000 to a card charging an uncapped 3% fee and you'll be paying £150 for the privilege - so you can see why a number of people are put off.

But believe it or not, there are still cards available that don't charge a balance transfer fee at all. Now, unsurprisingly you won't find these cards offering a table topping maximum 0% period, but if you're only in need of a breathing space period of 6 months or so, they could be just the thing.

I did some checking with independent finance body Moneyfacts, to see how many 0% cards I could find that don't charge a balance transfer fee.

0% Balance Transfer cards with no balance transfer fee

MC = Mastercard

As you can see I found three offering 0% deals for 6 months. However, the savings to be made by moving debt to one of these cards can make the effort worthwhile. According to Moneyfacts, if you currently have a Barclaycard Platinum MasterCard (charging 14.9% APR) and transferred a balance of £5,000 to the Norwich & Peterborough BS card (and you typically made the minimum payment each month) you could save over £346 in interest over the year. If you were instead to transfer this debt to a 0% card charging an uncapped balance transfer fee of 3%, you would immediately need to fork out £150, which would hack into the maximum savings you could make.

Of course, there's a valid argument that says an extra six or more months at 0% is a small price to pay for that £150 fee. Moving the same balance from the Barclaycard above to the Egg Visa card (currently offering 0% for 12 months, 3% fee) would mean saving a maximum annual total of £644, according to Moneyfacts.

But for those that simply don't need a whole year to clear their debt, why not maximise savings and choose a card offering 0% for 6 months with no fee? Apart from anything else, it could give you the impetus to save up that cash and pay off your balance quickly.

And on that note, don't forget that 0% cards are only for the disciplined. If you should miss just one minimum monthly payment you would find any savings made eaten up with fees and charges, making the exercise pointless. What's more, when taking out a 0% card for balance transfers, always remember to cut up that card and not use it (unless in the rare case it offers the same 0% period for new purchases) or you'll risk being charged interest!

So don't forget to check out credit cards offering shorter balance transfer periods when considering moving that balance - you may just find you can snap one up with no balance transfer fee.

More: 0% vs. Cashback Credit cards | Find a top 0% card in our Credit Card Centre