It looks like a fresh price war has broken out as credit card providers battle to offer the cheapest 0% balance transfers.
Fluid has cut the balance transfer fee on its Low Fee Visa to 0.5%.
The card now offers the joint cheapest 0% balance transfer deal on the market.
It comes with 12 months of 0% intereston balance transfers, as well as three months interest-free on purchases and 12 months of 0% interest on money transfers (with a 4% handling fee).
A unique feature of the Fluid card is you can get an idea of how likely you are to be accepted for the card before going through with a full application, which is good news for your credit record!
Price war
[SPOTLIGHT]The Fluid Low Fee Visa matches the offer launched by Sainsbury’s Bank last week.
Its Nectar Low Balance Transfer Fee MasterCard also comes with 12 months interest-free on balance transfers with a 0.5% fee, but offers a beefier 12 months 0% on purchases rather than three.
The Post Office has cut its own balance transfer fee too, offering arguably the best low-fee 0% card around. The Platinum Credit Card comes with 18 months of 0% interest on balance transfers with a 0.7% fee, as well as three months 0% on purchases.
This battle between providers can only be good news for borrowers, but how do you decide on the best deal for you?
Getting the best deal
Getting the best 0% balance transfer deal means striking a balance between the length of an offer and the fee.
You will need to get a card with a long enough 0% period to clear your debt before interest kicks in, but also try to bag the smallest fee you can.
There are now plenty of 0% cards with fees of 1.5% or less as the table below demonstrates.
|
Credit card |
0% period |
Balance transfer fee |
Fee paid on £2,000 transfer |
Representative APR |
|
12 months |
0.5% |
£10 |
18.9% |
|
|
12 months |
0.5% |
£10 |
18.9% |
|
|
Tesco Bank Clubcard Credit Card with Low Balance Transfer Fee |
12 months |
0.65% |
£13 |
18.9% |
|
18 months |
0.7% |
£14 |
17.8% |
|
|
15 months |
0.7% |
£14 |
17.9% |
|
|
Bank of Scotland 15-Month Platinum Balance Transfer MasterCard |
15 months |
0.7% |
£14 |
17.9% |
|
15 months |
0.8% |
£16 |
17.9% |
|
|
15 months |
0.8% |
£16 |
17.9% |
|
|
17 months |
0.9% |
£19 |
18.9% |
|
|
13 months |
1% |
£20 |
17.9% |
|
|
24 months |
1.5% |
£30 |
17.9% |
|
|
24 months |
1.5% |
£30 |
17.9% |
|
|
24 months |
1.5% |
£30 |
18.9% |
As you can see the cheapest deals from Fluid and Sainsbury’s Bank only provide a year for you to clear your debt. But the Post Office card offers six months more for just 0.2% extra on the fee.
To clear a £2,000 debt within the introductory periods it would cost £167 a month with the Fluid or Sainsbury’s Bank cards but with the Post Office card you'll need pay £111. So a deal that costs £3 more in a one-off fee saves you £56 a month on repayments.
You can use the same logic on the beefier 24-month deals from Lloyds Bank, Bank of Scotland and Halifax. On a £2,000 debt you would pay £20 extra on the fee to transfer the balance, but only have to budget for £83 a month to clear the debt before the 0% deal ends, a whopping £84 less than the leading deals.
If you need longer
If 12, 18 or even 24 months isn’t enough time to clear what you owe, you might what to consider a longer lasting deal. However, you’ll need to pay a bigger fee for the extra time in which to clear the balance.
The table below highlights the cards with the longest 0% periods available at the moment.
|
Credit card |
0% period |
Balance transfer fee |
Fee paid on £2,000 transfer |
Representative APR |
|
32 months |
2.99% |
£59.80 |
18.9% |
|
|
31 months |
2.89% |
£57.80 |
18.9% |
|
|
31 months |
2.89% |
£57.80 |
18.9% |
|
|
31 months |
3% |
£60 |
18.9% |
|
|
30 months |
2.9% |
£58 |
18.9% |
|
|
HSBC Credit Card* |
30 months |
3.3% |
£66 |
18.9% |
|
29 months |
2.89% |
£57.80 |
18.9% |
|
|
Arsenal/Aston Villa/Chelsea/Liverpool/Manchester United/Tottenham Hotspur credit cards |
29 months |
2.89% |
£57.80 |
18.9% |
|
29 months |
2.9% |
£58 |
18.9% |
|
|
29 months |
2.99% |
£59.80 |
18.9% |
|
|
29 months |
3% |
£60 |
18.9% |
*HSBC current account customers only
Play your cards right
Whichever deal you go for, make sure you play by the rules.
You’ll need to make minimum monthly repayments each month. If you don’t, any 0% offers on the card will be withdrawn.
Also remember to try and pay off what you owe before any 0% period ends or else you’ll have to start paying interest on your balance again.
More on borrowing:
The best cashback credit cards
Overdrafts are priced unfairly, says FCA