Yahoo Finance 
Switch credit cards and save hundreds
New research from Confused estimates that the average UK credit card debt is £1,753, and a quarter of us only pay the minimum off our cards each month. If you had that size of debt on a card with an interest rate of 17.9% and you only paid a minimum payment of £50 a month, it would take you over four years to pay it off. And it would cost you £661 in interest.
A 0% balance transfer credit card takes interest out of the equation, in exchange for a transfer fee. So you have a nice, long period in which to pay off that debt (or as much of it as you can) without interest charges taking a slice.
A handful of new 0% balance transfer cards have been launched, all jumping right to the top of the best buy tables. And the good news for many borrowers is that they don’t come from Barclaycard!
For a couple of years now, Barclaycard has dominated the balance transfer market, consistently setting new records in terms of the length of the 0% period on offer. The trouble is, you can’t transfer debt between two cards from the same credit card provider. So if you’ve got money sitting on a Barclaycard already, you’ll need to look elsewhere for your balance transfer needs.
Let’s take a look at the new cards on the block and how they compare.
NatWest and Royal Bank of Scotland Platinum MasterCards
First up, we have the Platinum Mastercards from NatWest and Royal Bank of Scotland.
These cards offer 27 months of 0% interest on balance transfers.
To transfer the debt over, you’ll need to pay a fee of 2.99% of the balance you’re moving. On a £2,000 debt, that works out at a fee of £59.80.
The cards also offer six months of 0% interest on purchases, and come with a representative APR of 18.9%.
Halifax goes longer
Halifax has extended the 0% balance transfer period and reduced the balance transfer fee on its top balance transfer credit card. The Halifax 27-Month card now offers 27 months free from interest on balance transfers, with a transfer fee of 3%. On a £2,000 transfer, that’s £60.
The card comes with an APR of 18.9% and offers 0% on purchases for three months.
This deal only has to be offered to 51% of successful applicants – so be warned, you may be offered a slightly different deal with a 0% period of anything from 21 months up and an APR of 18.9%-25.9%.
Paying a smaller fee
Balance transfer cards tend to come in two forms – those that offer long 0% periods, and those that charge smaller balance transfer fees. This latter category has seen a clutch of excellent new cards enter the scene from Bank of Scotland, Lloyds TSB, NatWest and Royal Bank of Scotland.
Let's start with Bank of Scotland and Lloyds TSB's Platinum Balance Transfer cards, which allow you to avoid interest on your debt for two years but with the much smaller fee of 1.5% of the debt you transfer. On a £2,000 debt, that works out at just £30.
However, you will need to actually pay a 3% fee at first – half of that fee is then refunded to you within 60 days of the transfer.
Both cards also offer 0% on purchases for three months and come with an APR of 17.9%.
As with the Halifax card, you may be offered a slightly different deal if your application is successful; only 51% of accepted borrowers have to be given this deal. You may be given a 0% period of as little as 18 months, with an APR ranging from 17.9% to 25.9%.
The Platinum Balance Transfer and Purchase cards from NatWest and Royal Bank of Scotland offer an even cheaper transfer, though you'll have to settle for for a smaller 0% period. You get 15 months of 0% interest on both purchases and balance transfers, with a tiny balance transfer fee of 0.9%. After the interest-free periods end there's an APR of 16.9%
The longest 0% balance transfer credit cards
Credit card | 0% balance transfer period | Balance transfer fee | Representative APR |
28 months | 3.5% | 18.9% | |
27 months | 2.99% | 18.9% | |
27 months | 2.99% | 18.9% | |
27 months | 2.99% | 18.9% | |
27 months | 3% | 18.9% | |
27 months | 3.15% | 16.9% | |
Fluid 26 Month Balance Transfer Visa | 26 months | 2.89% | 18.9% |
26 months | 2.4% | 15.9% | |
26 months | 2.4% | 17.9% | |
26 months | 2.99% | 17.9% |
*Only available to current account customers
As you can see, there are now ten cards offering 26 months or more of 0% interest, a staggering state of affairs. The new Halifax, NatWest and RBS cards are all very strong contenders.
[Compare the 0% balance transfer cards with the longest interest-free periods]
The cheapest 0% balance transfer credit cards
Credit card | 0% balance transfer period | Balance transfer fee | Representative APR |
15 months | 0.9% | 16.9% | |
Royal Bank of Scotland Platinum Balance Transfer and Purchase Card | 15 months | 0.9% | 16.9% |
12 months | 0.9% | 16.9% | |
15 months | 1% | 17.9% | |
15 months | 1% | 18.9% | |
Fluid Low Fee Visa | 14 months | 1% | 18.9% |
13 months | 1% | 17.9% | |
24 months | 1.5% | 17.9% | |
24 months | 1.5% | 17.9% | |
16 months | 1.5% | 18.9% |
In our view, if you are likely to take a while to pay off that debt, it’s well worth paying an extra 0.6% fee for the sake of doubling the 0% period with the Bank of Scotland or Lloyds TSB Platinum cards, compared to the shorter Tesco, RBS and NatWest cards. On a £2,000 debt, that’s a difference of just £12.
[Compare the 0% cards with the lowest balance transfer fees]
Balance transfer best practice
It’s a good idea to work out exactly how much you will need to pay off each month in order to clear the debt before the 0% period ends. Sure, right now there are loads of amazing 0% deals on offer, but there’s no guarantee that will be the case in 2015 when some of these leading deals come to an end.
And make sure you set up a direct debt to pay at least the minimum each month. Miss a payment and the lender may take your 0% deal away entirely!
