Are 0% Balance Transfers Still Going Strong?
Competition has driven a shift in the credit card balance-transfers market. Here's how to make sure you still get a good deal.
Gone are the days when there were no fees for transferring your credit-card balance. A couple of years ago this was relatively common, but now you'll have to pay for the privilege. The credit-card industry doesn't have the best of reputations, not least because of the many ploys which regularly sting us consumers. The hike in fees on balance transfers is just one of these and typically you'll now have to pay between 2% and 3% of your balance.Nevertheless, 0% balance-transfer deals continue to be an excellent strategy for getting on top of our debts. I've looked into the very best deals around, which are shown below. These cards are best for balance transfers only, as the 0% deals on purchases run over a significantly shorter period.Best Six Cards for 0% Balance Transfers OnlyCredit card 0% on balancetransfersTransfer fee 0% onpurchasesTypical APR(variable)Virgin Money Credit Card15 months 2.98% 3 months15.9% Barclaycard PlatinumCredit Card14 months2.5% 3 months14.9% NatWest Credit Card13 months2.5% 3 months13.9%Royal Bank of ScotlandClassic13 months 2.5% 3 months13.9% MintUntil 1 Oct 20082.5%Until 1 March 200814.9%Abbey Credit Card12 months2.5% 3 months15.9% Extended balance-transfer periods are becoming more widespread. You won't, for example, pay any interest on balances transferred to the Virgin Money Credit Card for the first 15 months. (The fee is 2.98% fee.) Likewise, Barclaycard is holding its own by offering a 14-month deal (2.5% fee). NatWest and Royal Bank of Scotland want to increase market share, so earlier this year they lengthened their interest-free periods to 13 months, but left the fee at just 2%.But, on the other hand, you'll only enjoy interest-free purchases for the first three months on most of these cards. After that, typical APRs of 14%-16% will kick in and you may find the competitive offer you started out with has quickly turned sour. Intense competition among credit-card companies has indeed led to increasingly long balance-transfer periods as they fight each other for a decent share of the market. And, if you can afford to repay your balance in full within this period, you will escape paying any interest at all (although you will pay the transfer fee).But this appears to be at the expense of attractive 0% deals on purchases which conversely are getting shorter. But still, these cards continue to be a good choice if you don't intend to use your new credit card for any further spending. If you think you will need to spend on your new card once you've transferred your balance, I'll take a look at the best deals for combining both in my follow-up article Pay 0% On Your Purchases And Existing Debts.Clearly 0% balance transfers remain a useful tool for managing your debts. One thing's for certain, if the credit-card market stays as fiercely competitive, and there's no reason why it shouldn't for now, you'll be able to take advantage of tempting 0% deals for some time to come. > Transfer Balance To 0% And Dodge The Fee! | What's Going To Happen To Credit Cards?> Don't forget that you can use The Fool to compare credit cards of every kind.