Interest-Free Without A Fee

When moving existing debts to a 0% credit card, you're almost certain to be charged a fee. We look at the last of the fee-free cards.

If credit card debts are getting you down, then a simple way to fight back is to stop the clock on your interest bill.

The easiest way to take a break from interest payments is to transfer your existing balances to one of dozens of credit cards which charge no interest on balance transfers for an extended introductory period. As you'd expect, almost all of these '0% balance transfer' offers come with strings attached.

In particular, you can expect to pay a transfer fee of between 2% and 3% of the value of each transfer. Thus, a transfer of, say, £2,500 to a card which levies a fee of 2% would set you back £50.

If you want an interest-free deal which lasts longer than six months, then you've no choice: you have to pay transfer fees, because every single credit card in this category levies these charges. However, if you're willing to settle for a shorter-term 0% deal (one lasting up to six months), then you can dodge transfer fees.

Until about a year ago, there were dozens of fee-free balance transfer deals to choose from. Now, according to independent financial analyst Moneyfacts (which powers the Fool's search engines for credit cards, personal loans, savings accounts, etc.), only four card issuers provide fee-free transfers. Here they are:

The last remaining fee-free balance transfers

Given that you're unlikely to obtain two 0% credit cards from the same issuer within a sensible timescale, you're limited to just three providers (plus Northern Bank if you live in Northern Ireland). What's more, if you want a six-month 0% deal, then your only choice is to apply for an Ulster Bank credit card. Otherwise, you can only enjoy a five-month break from interest without paying transfer fees.

In summary, if you want a fee-free 0% transfer deal, then your choice is strictly limited. Also, bear in mind that it can take up to four weeks to open an account and arrange any 0% transfers. Hence, you may only enjoy, say, four months of interest-free bliss before being forced to move on to the next 0% deal.

Finally, if you lack the commitment or patience to flip between 0% deals perhaps two or three times a year, then you might be better off taking out a long-term 0% deal (lasting a year or more) and paying a transfer fee. The choice, as they say, is yours!

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