Interest-free deals are getting more competitive.
There’s never been a better time to get a 0% purchase or 0% balance transfer credit card, according to new figures.
The latest Moneyfacts UK Credit Card Trends report shows introductory interest-free periods on balance transfer and purchase credit cards have reached new highs over the quarter.
It says the competition between lenders has also helped to drive down the cost of borrowing with average balance transfer fees dropping over the same period.
0% purchase deals
The average introductory term on 0% purchase cards in the market increased by nine days from December 2014 to stand at a new record of 260 days.
The very best 0% purchase card on the market, the Santander 123 Credit Card, now offers nearly two years interest-free on shopping.
Here are the longest 0% periods on offer right now for new purchases.
|
Credit card |
0% period on purchases |
Representative APR |
|
23 months |
16.5% |
|
|
20 months |
18.9% |
|
|
20 months |
18.9% |
|
|
Halifax Purchase Credit Card |
20 months |
18.9% |
|
19 months |
18.9% |
|
|
19 months |
18.9% |
|
|
Lloyds Bank 19-Month Platinum |
19 months |
18.9% |
|
Bank of Scotland 19-Month Purchase |
19 months |
18.9% |
*Annual fee of £24
Compare the best 0% purchase credit cards
0% balance transfer deals
The average 0% balance transfer term has increased by 20 days quarter-on-quarter, reaching a new record of 491 days.
Barclaycard launched a 0% deal lasting 36 months in this period, the longest ever seen, which has helped boost competition and encourage other providers to make similar moves. See: Lenders scrap for top 0% balance transfer credit card honours for more.
Below are the top cards with the longest 0% period on balance transfers.
|
Credit card |
0% period on balance transfers |
Balance transfer fee |
Fee paid on £2,000 transfer |
Representative APR |
|
36 months |
2.99% |
£59.80 |
18.9% |
|
|
Virgin Money Balance Transfer Credit Card |
36 months |
3.49% |
£69.80 |
18.9% |
|
35 months |
2.79% |
£55.80 |
18.9% |
|
|
35 months |
2.8% |
£56 |
18.9% |
|
|
35 months |
3% |
£60 |
18.9% |
|
|
Bank of Scotland Platinum 35-Month Balance Transfer Credit Card |
35 months |
3% |
£60 |
18.9% |
|
34 months |
2.90% |
£58 |
18.9% |
|
|
HSBC Credit Card |
34 months |
3.3% |
£66 |
18.9% |
Compare the best 0% balance transfer deals
Cost of borrowing getting cheaper
At the same time, Moneyfacts reports the average balance transfer fee has fallen 0.08% quarter-on-quarter to stand at 2.36%.
This shows that providers are genuinely cutting the cost of borrowing.
If you are willing to sacrifice the length of your 0% period there are some very cheap and even free 0% balance transfers out there. Below are the top deals witha fee of 1.25% or less.
|
Credit card |
0% period on balance transfers |
Balance transfer fee |
Fee paid on £2,000 transfer |
Representative APR |
|
23 months |
None |
£0 |
16.5% |
|
|
15 months |
None |
£0 |
18.9% |
|
|
13 months |
None |
£0 |
18.9% |
|
|
12 months |
None |
£0 |
18.9% |
|
|
15 months |
0.25% |
£5 |
15.9% |
|
|
15 months |
0.35% |
£7 |
17.9% |
|
|
18 months |
0.79% |
£15.80 |
17.8% |
|
|
19 months |
1% |
£20 |
18.9% |
|
|
Virgin Money Balance Transfer Credit Card |
26 months |
1.25% |
£25 |
18.9% |
|
28 months |
1.50% |
£30 |
18.9% |
|
|
28 months |
1.50% |
£30 |
18.9% |
|
|
28 months |
1.50% |
£30 |
18.9% |
*£24 annual fee
**Nationwide current account customers only
Compare low-fee 0% balance transfer credit cards
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Supermarket credit cards vs. cashback credit cards
The challenger banks fighting back against the high street giants
Clydesdale and Yorkshire Banks relaunch £150 switching offer