The brilliant new debt-busting credit card

If you are after a card with a low APR for life, then there's a new market leader to consider.

So, David Cameron thinks it would be a good idea if we all paid off our credit card debts. I for one am relieved that someone in such a high profile position has finally come out and had the courage and wisdom to say such a thing.

Up to now, the thought simply hadn’t crossed my mind that wasting money on interest payments was perhaps not the best use of my hard-earned cash!

But once you get past the patronising, stating-of-the-obvious from our dear PM - and ignore the fact that if we all put our money towards paying off debt rather than spending on actual goods, the economy would collapse into an even worse state than it currently is – it’s obviously a good idea to have as little interest-bearing debt on credit cards as possible.

And one brilliant new credit card offers you the chance to do just that, and at a far better rate than its rivals!

The Sainsbury’s Low Rate MasterCard

Sainsbury’s has shaken up the credit card market by launching a new market-leading low APR card. The card offers a rate of just 6.9% APR on both purchases and balance transfers, and is by a distance the lowest rate on offer from a card of this kind.

Here’s how it compares to the best of the rest:

But given you can get cards which offer 0% periods on both purchases and balance transfers, why would you want to go for a low APR card instead?

The benefits of a low APR card

A low APR card is very much a long-term choice. With a 0% card, sure you get to enjoy 12 months plus free from interest, but once that period comes to an end the interest rate your cash will be subjected to will quickly ratchet up to around 18%-19%.

Obviously that’s not a problem if you’ve finished paying off that debt or large purchase, but if you still have a balance that needs clearing, chances are, you may need to start shopping around for a new card.

No such issues with a low APR card, so if you think you’ll need longer than a year or so to pay off that debt, a card like Sainsbury’s may be a better bet.

What’s more, you don’t have to pay a fee to shift a balance onto a low APR card, unlike with a 0% balance transfer card. The market-leading Halifax MasterCard (offering 22 months interest-free) charges a transfer fee of a whopping 3.5%. On a transfer of £7,500, that’s a fee of £262.50 on top!

Cards like this are not just great if you have a big pile of debt either, they are also ideally suited for those of us who occasionally have months where our outgoings are a bit higher than the money coming in, but don’t want to rely on an overdraft to help meet those costs.

And then there’s the simplicity of a low APR card. You don’t have to worry about keeping separate cards for purchases and balance transfers, you just have one credit card meeting all your requirements.

The best 0% purchase cards

That’s not to say that 0% cards do not have their fans. In the build-up to my wedding, I knew that I had a lot of big purchases to make, so made use of a 0% purchase card to help spread the payments and give me a fair bit of breathing space before I started getting charged interest.

Back then, getting 12 months of 0% interest was an amazing deal, so borrowers are in an even better position now, with deals of up to 15 months free from interest as the table below demonstrates.

The best 0% balance transfer cards

And you can get even longer on a 0% balance transfer card. So if you’ve already got a stack of debt that needs clearing, or you’re about to do some big spending and don’t fancy a 0% purchases card, then moving the debt over to one of the cards below is worth considering.

Here are the five cards offering the longest 0% period:

However, in recent weeks, a number of card providers have opted to compete instead on the transfer fee rather than extending the 0% interest period. Here are some of the most attractive fees around on balance transfer cards at the moment:

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