The supermarket’s longest ever 0% balance transfer offer on credit cards makes it one of the most competitive on the market.
Tesco has revamped its Clubcard Balance Transfer Credit Card so that it now offers borrowers 0% interest on balance transfers for an incredible 32 months. That means no interest payments on balances until early 2017. Cardholders only have to chip in a 2.9% transfer fee to get started.
After the 32-month period has ended, representative APR increases to 18.9%.
On top of that, Tesco is giving cardholders 0% on purchases for three months. If you spend on the Clubcard Balance Transfer Credit Card you are rewarded with Clubcard points. You get five points for every £4 spent in-store and on Tesco fuel, and one point for ever £4 spent elsewhere.
How it fares on the market
There are a number of credit cards currently offering 30 months of more free from interest on balance transfers, as we've detailed in the table below.
|
Credit Card |
0% period on balance transfers |
Balance transfer fee |
Cost of transferring £2,000 balance |
Representative APR |
|
33 months |
2.99% |
£59.80 |
18.9% |
|
|
32 months |
2.89% |
£57.80 |
18.9% |
|
| Tesco Clubcard Balance Transfer Credit Card | 32 months | 2.9% | £58 | 18.9% |
|
32 months |
3% |
£60 |
18.9% |
|
|
Bank of Scotland Platinum 32-Month Balance Transfer Credit Card |
32 months |
3.5% |
£70 |
18.9% |
|
32 months |
3.5% |
£70 |
18.94% |
|
| MBNA 31-Month Platinum Credit Card | 31 months | 2.88% | £57.60 | 18.9% |
|
31 months |
2.89% |
£57.80 |
18.9% |
|
|
30 months |
2.5% |
£50 |
18.9% |
So while Tesco's card is very competitive, it's still not quite able to edge Barclaycard off the top of the best buy tables. However, if you need an alternative to Barclaycard (perhaps because you are transferring a balance from a Barclaycard credit card) then the Tesco card is the best bet.
Compare 0% balance transfer credit cards
Long term vs. short term cards
Working out the right balance transfer credit card is a balancing act. You need to consider how much debt you have and how long you will need to pay it off.
If you have a hefty amount of money to repay, a long-term card is best as you buy yourself more time to clear your debts without worrying about interest charges, so every penny goes towards getting you out of the red.
But if you’re more confident that you can clear a smaller debt within a smaller space of time, a card with a shorter 0% transfer period is better for you. That's because they charge much smaller transfer fees. For example Barclaycard's 6-Month Balance Transfer Credit Card doesn't charge a transfer fee at all! Read The best low-fee balance transfer credit cards.
Both long term and short term cards revert back to the normal Representative APR once the 0% period has come to an end, so make sure you have enough time to pay off your debt in full. Many also offer 0% on purchases for a set time to encourage spending but this can lead to more debt. Use it wisely.
Compare 0% balance transfer credit cards
How do you feel about this new credit card? Would you use it? Tell us in the comments below.
More on credit cards:
The best 0% balance transfer credit cards
Longest 0% period on a balance transfer credit card now 33 months