Yahoo Finance 
You can pay off your credit card debts for free
If you have credit card debts and a good credit rating, now is a great time to get on top of them and pay them off.
Tesco recently launched a new credit card offering an interest-free period of a year on balance transfers. Even more enticingly, you don’t have to pay a balance transfer fee for shifting your existing credit card debts onto this card.
Despite fierce competition among credit card companies for balance transfer customers, a credit card with no balance transfer fee is still very rare. And particularly a credit card with such a long interest-free period.
Here’s how the Tesco 12-month card compares to the competition when it comes to a combination of low balance transfer fee and interest-free period.
Credit card | Length of interest-free period | Balance transfer fee | Representative APR when interest-free period ends |
12 months | 0% | 16.9% | |
15 months | 1% | 17.9% | |
15 months | 1% | 17.9% | |
13 months | 1% | 17.9% | |
13 months | 1% | 18.9% | |
13 months | 1% | 17.9% | |
16 months | 1.28% | 18.9% |
As you can see, the Tesco card stands head and shoulders above the competition in terms of the balance transfer fee and is pretty competitive for the length of the interest-free period too.
If you do want to apply for it, you should do your sums and make sure you can pay off your debt before a year is up, otherwise you'll be charged interest of at least 16.9% APR. If you don't manage to pay everything off in a year, you could try and switch to another balance transfer card but you may well have to pay a fee for the privilege and you may not be accepted so it's a bit of a gamble.
If you think you'll definitely need much longer to pay off your debts, you might be better off with the Barclaycard 26-Month Platinum card, which offers 26 months interest free on balance transfers for a fee of 2.47% (the fee is reduced if you apply during June). Or there's the Halifax 25-Month Balance Transfer card with 25 months with no interest to pay on transfers and a balance transfer fee of just 2%.
Whichever way you go, it's crucial you make sure your credit record remains in good shape by making at least the minimum payment each month and never missing a payment. If you do miss a payment, your interest-free period could be withdrawn.
[Compare the 0% balance transfer cards with the lowest balance transfer fees]
Tesco card good for purchases too
Even if you don't have card debt to pay off, the Tesco 12-month card might be tempting as it also offers a 12-month interest-free period on purchases plus Clubcard points on your spending.
You earn four Clubcard points per £1 spent, providing the purchase is at least £4.
If you do use the card for purchases, it's again vital you make at least the minimum payment each month and never miss a payment.
However, it's worth pointing out that there's an even better Tesco card for an interest-free period on purchases and that's the Tesco Clubcard for Purchases credit card. This offers a 16-month interest-free window on purchases and the same Clubcard points as the 12-month card.
If you do have credit card debts, be careful not to run up more by using the Tesco 12-month card to pay for purchases which you then can't afford to pay off.
