If you don't have a spotless credit rating, it can be hard to get a 0% credit card. However, Capital One has launched a card that is available to people with an 'average' credit history.
We often sing the praises of 0% balance transfer credit cards at lovemoney.com. If you’re carrying some debt on your card, transfer to it a 0% card and all of your monthly repayments can go towards your debt rather than sky-high interest payments.
The only problem is that many folk can’t get 0% cards – their credit ratings aren’t good enough. So I was really pleased to see that Capital One has launched a 0% card aimed at people with an ‘average to good credit history.’
The card is called the Capital One Balance Card Visa card. You won’t have to pay any interest on your debt until 30th April 2013, and the balance transfer fee is reasonable at 3%.
Who can get it?
So who can get this card?
Capital One says you probably won’t get a card if:
- You’ve never had credit in the UK before
- You’ve been declared bankrupt in the last 12 months
- You’ve had any County Court Judgements (CCJs) or defaults in the past 12 months
However, if you have a CCJ that happened over a year ago, you have a much better chance of getting one of these cards. You just need to show that you’ve turned over a new leaf since your CCJ, you’re successfully paying your bills on time and generally managing your debt in a sensible manner.
It will also help your application if you’re on the electoral roll. In other words, you’ll be able to get this card if you have an average score, but not one that is horrendously bad.
Not the best
This is great news because the Capital One card will basically give you a seven-month 0% period when you won’t have to pay any interest on your credit card debt.
That said, the Capital One card isn’t the best 0% card on the market. In fact, it’s nowhere near the best. So let’s see how this card compares with the top cards on the market:
Top 0% balance transfer cards
|
Credit card |
0% period |
Balance transfer fee |
Fee paid on £2,000 transfer |
Normal APR |
Notes |
|
23 months |
2.8% |
£56 |
17.9% |
|
|
|
HSBC Visa |
23 months |
3.3% |
£66 |
17.9% |
HSBC current account customers only |
|
22 months |
2.6% |
£52 |
17.9% |
|
|
|
22 months |
2.9% |
£58 |
16.9% |
One clubcard for every £4 spent on card |
|
|
22 months |
3.2% |
£64 |
17.9% |
|
|
|
22 months |
3.5% |
£70 |
17.9% |
|
|
|
20 months |
2.85% |
£57 |
16.9% |
|
|
|
20 months |
3% |
£60 |
16.9% |
|
|
|
first direct gold card |
20 months |
2.9% |
£58 |
16.9% |
|
|
20 months |
3.1% |
£62 |
15.9% |
|
|
|
15 months |
1.5% |
£30 |
17.9% |
50% refund on balance transfers over £1500 before 16th Nov. |
|
|
15 months |
1.5% |
£30 |
15.9% |
|
|
|
12 months |
1% |
£20 |
19.9% |
Initial 1.2% fee is charged, followed by 0.2% refund. |
|
|
9 months |
2.5% |
£50 |
19.9% |
Suitable for strengthening credit rating |
|
|
Until 30th April 2013 |
3% |
£60 |
34.9% |
For people with average to good credit history |
As you can see there are plenty of cards that offer longer 0% periods than the Capital One card, and several also have lower balance transfer fees. In many ways, the Capital One card is the worst card in the table.
But because people with average credit ratings won’t be able to get the best 0% cards, the Capital One card is a welcome addition to the market and will work well for some folk.
In fact, there’s only one other attractive 0% card aiming at the ‘average credit rating’ market. That’s the Barclaycard Gold Visa card. It offers a nine-month interest-free period with a 2.5% fee. Those are better terms than for the Capital One card, but if your existing debt is already on a Barclaycard, you’ll have to go for the Capital One card.
Just be careful though when your 0% period expires. If you haven't managed to fully pay off your debt at that stage, you'll have to pay 34.9% interest with the Capital One card, and 19.9% with the Barclaycard Gold Visa. It makes sense to pay off your debt within the 0% period if you can.
Credit rating
I imagine that some readers won’t be sure whether they have a spotless credit rating or just an average one. If that’s the case you could get a free credit report from Experian and find out what the banks think about you as a potential borrower. Read more in What REALLY damages your credit rating.
You could also apply for a top credit card and see if you get turned down or not. It’s ok to apply for one top card, but if you get refused by one, don’t start applying to several card providers. That’s because multiple applications for cards can damage your credit score – the banks will think you’re desperate for cash and mark you down as a result.
But if you apply for one top card, get turned down, and then apply for either the Capital One card or the Barclaycard Gold, your rating shouldn’t be seriously affected.
Hopefully, you’ll be able to get one of those two cards, and then you can really focus on paying down your credit card debt. Good luck!
More on credit cards:
The best 0% purchase credit cards
Luma vs Aqua: credit builder cards get better
Barclaycard launches 23 month interest-free balance transfer credit card