The MBNA Fluid credit card is giving Barclaycard a run for its money when it comes to balance transfer credit cards with only a small transfer fee.
On August 9th the fantastic half-price 0% balance transfer deals from Barclaycard will come to an end. So what can you do if you miss out, or if you need to transfer debt from an existing Barclaycard?
Well, a new card powered by MBNA comes with a similar low-cost balance transfer fee as standard.
The Fluid card
With the new Fluid credit card you can get 0% on balance transfers for a handling fee of 1.5% as long as you transfer the balance within 60 days of opening the account.
This is a great transfer rate as some cards can charge as much as 3.9% to do the same thing.
The balance you transfer will remain interest free for 15 months, but is then subject to a rate of 15.9% APR which is much cheaper than the typical 16.9%, 17.9% and 19.9% APRS you see floating about with other similar deals.
In addition, borrowers can get interest-free purchases for five months, plus 30% off Fluid travel insurance.
Applying won’t damage your credit rating
A great feature of this card is the ability to determine if you're likely to be approved without performing a credit check.
This 'soft search' can save you time and cuts the chance of damaging your credit rating by using things like annual salary, age, employment status and address, to see if your profile is likely to make you a good match for the card .
If your profile ticks all the right boxes you can go ahead and apply. But if not, you are given a list of alternatives cards you could apply for instead.
Check out how to build an excellent credit history for some tips if you don't get through.
It can do money transfers too
Another great benefit of the Fluid card is that it doesn’t only deal with existing credit card debt. With the money transfer option you can fix an overdraft problem too.
To do this, you will need to transfer the balance of your Fluid card to the account with the overdraft. This money transfer can be done for a handling fee of 4.0% and has the same interest-free period of 15 months as balance transfers do.
[SPOTLIGHT]For more on this approach to debt, read the best money transfer credit cards.
Downsides
Unfortunately if the debt balance you're trying to transfer comes from BMI, MBNA or Virgin cards you won’t be able to use the Fluid credit card. And while the rate is nice and low, if you have a large debt to clear, you may be better off going for a card which charges a bigger transfer fee for the sake of an extra few months of 0% interest.
Why go for a balance transfer card?
A low-cost 0% balance transfer card can prevent existing debt growing. Using this method means all the repayments you make thereafter go towards reducing the size of the debt rather than paying off the interest. It's a great tool to help take control of your finances, but only really works if you clear the balance before the interest-free period runs out.
The cost of the transfer is important as this will be added to the debt, but so is the interest-free period as this determines how much breathing space you have to clear the balance before interest kicks in again.
Super low cost balance transfers under 3.0%
Here is a round up of the cheapest balance transfer credit cards around at the moment, all charging fees of under 3.0%.
|
Credit card |
Balance transfer fee |
Interest free balance transfer period |
Example of fee paid on transfer of £2,000 |
|
1.25% |
Nine months |
£25.00 |
|
|
1.30% |
21 months |
£26.00 |
|
|
1.45% |
22 months |
£29.00 |
|
|
1.45% |
14 months |
£29.00 |
|
|
1.50% |
15 months |
£30.00 |
|
|
2.85% |
20 months |
£57.00 |
Barclaycard rival
As you can see, once the Barclaycard offer expires in August, the Fluid card will become the table topper by a significant margin.
When Barclaycard doubles up its handling fees the next lowest balance transfer after the Fluid card will be for 2.50% on the Barclaycard Gold Visa, which only has an interest-free balance period of nine months - not great if you need longer to clear your debt.
Too much debt?
A low cost balance transfer card that has a significant interest-free period is a good first step in overhauling your finances.
But if you need more help contact the Consumer Credit Counselling Service or National Debtline for other ideas to resolve your money problems.
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