Lloyds has brought back its 21-month deal while Halifax has lowered the fee on its 25-month offer. But how do the changes stack up in the balance transfer market?
It’s all go in the 0% balance transfer credit card market.
Over the last couple of months credit card providers have been pulling out all the stops to make sure their balance transfer cards are one step ahead of the competition.
Early in June, Barclaycard launched a sale where the balance transfer fees on a selection of its best 0% cards were reduced by 15%.
And Tesco just last week unveiled a unique fee-free 0% balance transfer credit card lasting 12 months.
Now Lloyds has re-launched its Online Platinum 21-Month Balance Transfer MasterCard while Halifax has lowered the fee on its 25-Month Balance Transfer Card.
So let’s take a look at how these latest developments stack up in such a competitive space.
The Lloyds return
The Online Platinum from Lloyds offers borrowers a 0% interest deal for 21 months on credit card balances transferred within the first 90 days.
The card used to charge 3% on balance transfers but now only charges 1.5%.
It also offers three months interest-free on new purchases.
But is all this enough for it to make a mark in an overcrowded balance transfer market?
Low fee balance transfers
The Lloyds card represents one of the cheapest balance transfer cards around.
To see how it compares I have taken the best low fee balance transfer credit cards and arranged them by the cost of balance transfer.
|
Credit card |
0% period |
Balance transfer fee |
Fee paid on £2,000 transfer |
Representative APR after 0% period ends |
|
Tesco Bank Clubcard Credit Card with No Balance Transfer Fee |
12 months |
0% |
£0 |
16.9% |
|
15 months |
1% |
£20 |
17.9% |
|
|
15 months |
1% |
£20 |
17.9% |
|
|
13 months |
1% |
£20 |
18.9% |
|
|
13 months |
1% |
£20 |
18.9% |
|
|
13 months |
1% |
£20 |
17.9% |
|
|
16 months |
1.28% |
£25.60 |
18.9% |
|
|
Lloyds TSB Online Platinum 21-Month Balance Transfer MasterCard |
21 months |
1.5% |
£30 |
17.9% |
|
15 months |
1.5% |
£30 |
15.9% |
Lloyds is a dominant force when it comes to the cheapest balance transfer credit cards. It has three cards in the top nine lasting 13, 15 and 21 months.
But as you can see from the table the Tesco Bank Clubcard Credit Card with No Balance Transfer Fee is the best low fee balance transfer credit card because it costs absolutely nothing to transfer balances onto it.
[SPOTLIGHT]Although it can’t beat Tesco’s current fee-free offer on price, the new Lloyds addition makes its mark as the longest lasting low-fee balance transfer credit card.
Usually low-fee cards mean you have to sacrifice the length of the 0% deal by a significant amount. The table above is full of deals that last between 12 and 16 months. But the return of the Lloyds 21-Month Online Platinum has changed that.
With 21 months to clear the debt you transfer you will have nine months more than the market-leading Tesco card.
The Halifax fee drop
Now onto the changes from Halifax.
It hasn't launched a new card, but Halifax has dropped the fee on its existing 25-Month card from 3% to 2%.
To see what impact the Halifax deal has made I have picked out the longest lasting balance transfer credit cards that last 24 months or more.
The table below shows the results ordered by cheapest transfer.
|
Card |
0% period |
Balance transfer fee |
Fee paid on £2,000 transfer |
Representative APR after 0% period ends |
|
25 months |
2% |
£40 |
18.90% |
|
|
25 months |
2.04% (for June) |
£40.80 |
18.90% |
|
|
26 months |
2.65% |
£53 |
18.90% |
|
|
26 months |
2.65% |
£53 |
18.90% |
|
|
24 months |
2.89% |
£57.80 |
16.90% |
|
|
25 months |
2.90% |
£58 |
16.90% |
|
|
27 months |
2.98% (for June) |
£59.60 |
18.90% |
|
|
26 months |
2.99% |
£59.80 |
17.90% |
As you can see the Halifax 25-Month Balance Transfer Card is now offering the cheapest balance transfer of the longer-lasting balance transfer credit cards.
It has shifted Barclaycard from the top spot with its new lower price.
Barclaycard remains the longest-lasting balance transfer card with a top 27-month 0% deal, but by sacrificing two months you can save £19.60 on the price of a £2,000 transfer.
Picking the right card for you
Balance transfer cards work by shifting debt from an expensive credit card to one where you’ll pay no interest for a set time period.
You just need to decide how long you need to clear the debt and try to find the most reasonable fee.
As the 0% period is for a limited time, the aim should be clearing the debt before this ends and the interest kicks in.
If at this point you’ve still got debt on the card you could switch to another 0% deal, but there’s no guarantee you’ll be accepted.
More on credit cards:
The best money transfer credit cards
Barclaycard cuts credit card fees in June sale