Barclaycard launches the first ever 26-month 0% balance transfer card.
The war between credit card providers has kicked off once again as Barclaycard has launched a 26-month balance transfer card, the longest period ever offered on cards of this kind.
The card comes with a hefty 3.5% fee and is now the market-leading deal.
Tesco has also launched a new balance transfer card, offering 25 months interest-free with a 2.9% fee. But it was only at the top of the tables for a matter of course before being knocked down by the new Barclaycard offering.
Balance transfer competition
Providers in the balance transfer market are desperately trying to lure in new customers at the moment with Barclaycard remaining firmly in the top spot.
Last month there was a heated competition between Barclaycard and Halifax. First Barclaycard launched the first ever 25-month card and then Halifax shortly followed with its own card, though with a smaller fee of 3%. To this Barclaycard responded by pushing down its fee to 2.9% making it the market-leading offer.
Now Tesco has vied for a top spot with the latest version of its Clubcard credit card, but has again been toppled by two different cards from Barclaycard. The card has three months at 0% for new purchases, lower than the six months on offer from Barclaycard, but it also allows customers to collect Clubcard points when spending on it.
Five points will be added for every £4 spent so this is a good one for regular shoppers at Tesco. The card also gives you one point for every £4 spent at any other shop.
I’ve listed the top five cards with the longest balance transfer periods.
|
Card |
0% balance transfer period |
Transfer fee |
Fee paid on a £2,000 transfer |
|
26 months |
3.5% |
£70 |
|
| Barclaycard 25-Month Platinum Visa | 25 months | 2.8% | £56 |
|
25 months |
2.9% |
£58 |
|
|
25 months |
3% |
£60 |
|
|
24 months |
2.9% |
£58 |
Balance transfer cards with a smaller fee
The fee associated with a balance transfer card is important as if you’re not moving over that much money, the fee could wipe out any interest savings.
Therefore if you want a card with a lower fee, there are options available, although the length of the 0% period will be smaller.
Here I’ve listed five of the best low-fee cards and as you can see the average is around 1%, far lower than the average of 3% on cards with a longer 0% period.
|
Card |
0% balance transfer period |
Transfer fee |
Fee paid on a £2,000 transfer |
|
13 months |
1% |
£20 |
|
|
13 months |
1% |
£20 |
|
|
MBNA Platinum Credit Card |
14 months |
1.25% |
£25 |
|
15 months |
1.5% |
£30 |
|
|
16 months |
1.5% |
£30 |
A warning on balance transfer cards
Balance transfer cards have shot into the spotlight this year and they can be a really handy way of staving off expensive interest payments.
However, they only work if used correctly and that means paying off the debt on the credit card during the 0% period.
These cards tend to have higher-than-average interest rates so as soon as the 0% period ends, you’ll start paying a lot more. At this point it might be possible to switch to another card – but this isn’t guaranteed and you shouldn’t rely on doing this.
There are also penalties if you miss a payment as this could result in the 0% period ending, a fee and a black mark on your credit score.
Also, you need to remember that the headline interest rate isn't available to everyone and will depend on your own credit score. Many of the top cards are also only available to people with an excellent credit record.