Super-cheap balance transfer card launched

Two credit cards are changing their balance transfer fees giving customers a cheaper way to borrow money.

Barclaycard has re-launched the Barclaycard Platinum Low Fee Balance Transfer card with a 12-month 0% balance transfer window and more importantly, a fantastically low 0.9% balance transfer fee.

In response, Halifax is also ramping up the competition by lowering its balance transfer fee, from 3.5% to 3%, on its 22-month balance transfer credit card.

These deals are great news because balance transfer cards are great debt management tools. So if you’ve got a £2000 debt on your current credit card, you could transfer it to Barclaycard’s Low Fee card and not have to pay any interest on the debt for a year.

What’s more, now that Barclaycard has cut the balance transfer fee on this card to 0.9%, you’ll only have to pay an £18 fee when you make the transfer.

We can’t remember ever seeing a card with such a low fee – well, not since the days of no-fee 0% cards anyway.

Let's look at how this Barclaycard compares with some of the other leading 0% balance transfer cards on the market right now:

Credit card

0% period

Balance transfer fee

Fee paid on £2000 transfer

Representative APR after 0% period ends

Barclaycard Platinum Low Fee Balance Transfer Card

12 months

0.9%

£18

19.9%

Natwest Platinum Low Balance Transfer Fee

13 months

1%

£20

17.9%

Fluid card

15 months

1.5%

£30

17.9%

MBNA Everyday Credit Card

17 months

2%

£40

11.9%

Barclaycard 22-month Platinum

22 months

2.6%

£52

17.9%

Barclaycard 23-month Platinum

23 months

2.8%

£56

17.9%

Tesco Clubcard Credit Card for Balance Transfers

22 months

2.9%

£58

16.9%

Halifax 22-month Balance Transfer MasterCard

22 months

3%

£60

18.9%

Natwest Platinum

22 months

3.2%

£64

17.9%


Unsurprisingly, the low fee Barclaycard is the cheapest at 0.9%, but the 0% period only lasts for a year. That won’t matter for some people - if you think you can pay off your debt within 12 months, this Barclaycard is definitely the one to go for.

That’s assuming your existing debt isn’t already on a Barclaycard – in which case, you’ll have to transfer your debt to another credit card provider.

If you think you’ll need slightly longer to pay off your debt, the Natwest Platinum Low Balance Transfer Fee card gives you a 13-month interest-free period and a 1% fee.

Halifax

Of course, you may need a longer period to pay off your debt. In that case, the Halifax 22-month Balance Transfer MasterCard is a definite contender for your wallet.

Halifax has just cut the transfer fee on this card to 3%, making it a pretty competitive option.

True, this card isn’t the cheapest for this time period – that honour falls to the Barclaycard 22 Month Platinum card – but Halifax’s price cut is still very welcome. It’s important that the leading players in the market make the effort to compete with Barclaycard. After all, it’s only with competition that we’ll continue to get top credit card deals in the future.

Beware

Whichever card you go for, just make sure that you don’t give your card provider an excuse to cancel your 0% deal. It’s essential that you make your minimum payment on time every month. If you don’t, you may find that you’re suddenly hit by interest charges which could be as high as 19%.

Also, don’t be too ambitious when you decide how long it will take you to pay off your debt. If you haven’t paid off your debt when the 0% period ends, you’ll have to get another 0% card or start paying interest on your debt. And there’s no guarantee that you’ll be able to get another 0% when your current interest-free deal expires.

So if you think you might be able to pay off your debt in a year, but you’re not sure, you might be better off going for the Fluid card rather than the Low Fee Barclaycard. Yes, you’ll have to pay a higher 1.5% fee with the Fluid card, but at least you’ll be confident that you’ll definitely have paid off your debt when your 0% period ends.