Balance Transfer Credit Card Competition heats up as Barclaycard release best deal on the market
The winter months of the year are typically marked with cold weather, dark days, and a festive hangover that almost always takes a few months to get over. However, these are usually the least of peopleís worries; with the most pressing issue most have to face being tackling the debt they have accumulated from Christmas overspending.
However, the news that the 0% balance transfer card market is heating up to a historic high point will likely be welcome news to the ears of those who are currently struggling to deal with the ramifications of festive spending, and will likely give them the chance to retake control of their financial situation by shifting their debt to a securer, interest free card.
For those of you who are unfamiliar with 0% balance transfer cards, they are simply special credit cards that allow people who have growing liabilities to shift their value to one 0% card, where they can enjoy paying back their debt without having to worry about the total costs rising too fast.
The typical catch is that the card provider will take a handling fee for processing the transfer of your debt from your old providers to the new card, but nevertheless represent a great mechanism for debtors to access if they wish to obtain time to improve their financial standing. This is because once the typical 2.6% fee is paid for transferring the money; you can pay just the minimum amount for as long as the 0% offer is applicable on the card, which gives you ample time to improve your finances so that you are better placed for full repayment.
The biggest shortfall of these cards are however that applicants are required to have an exemplary credit rating in order to acquire one, which means that for many people, they will simply be unable to get access to one at this time.
However, if you feel that you have a solid credit rating, and are currently experiencing what you perceive to be short term financial difficulties, then below is a guide to the top offerings on the market that are well worth looking in order to give you time to improve your financial situation.
Cards to Consider
Barclaycard have released the best value 0% balance transfer card this week, with a credit card that offers users up to 31 months of interest fee payments. However, the Halifax, Tesco and small credit company Fluid all have excellent cards on offer at the moment that are well worth considering if you fail in your application with Barclaycard.
Barclaycard Platinum Extended Balance Transfer Card
Released this week, Barclaycard Platinum Extended Balance transfer card represents the best value on the market at the moment, with an initial 31 month interest free period. The fee for processing the transfer is set at 3.5%, which is pretty good considering the scale of time that they enable you to enjoy 0% interest for with your transferred money.
Furthermore, Barclaycard have promised to give a 0.51% refund to anyone who makes a transfer to their new account within 60 days of its opening, meaning that most will enjoy a highly competitive 2.99% rate on a 31 month deal.
Moreover, the card enables users to make purchases without interest charges for the first 6 months, though it should always be remembered that these cards are best suited for consolidation purposes, rather than for credit card spending.
The biggest shortfall of the card is that after the initial interest deal comes to an end, users are moved to an 18.9% rate, so when this happens, you should immediately start looking for a new offer to shift your debt as you will otherwise see your debt soar up in a short space of time.
Halifax Balance Transfer Credit Card
Barclaycardís new card toppled Halifaxís Balance transfer credit cards brief stay as the best deal on the market, but its 30 month 0% interest period is still nevertheless highly competitive and useful for purpose. The handling fee is pretty much equivalent to that of Barclaycard, and is set at 3%. This means that transferring £10,000 worth of debt will cost just £300, which is a price worth paying if you have debts of this level. The card also allows users to have 6 month interest free purchases, and moves them to an 18.9% interest rate when their deal comes to an end.
Though the deal is mildly worst than Barclaycard, it is still very much worth considering if you are someone who desires to acquire a card that has a long 0% period.
Tesco Clubcard Credit Card
Tescoís Clubcard Credit Card is another excellent alternative to Barclaycard, and offers users a 29 month 0% period at just a 2.9% handling charge. Though the card offers a lower 3 month period of interest free purchases, it also enables users to build up Clubcard points, which can then be used in Tesco stores to make purchases in the future. The current deal is set at 1 point for every £4 used on the card in external stores, and five points for every £4 used within Tesco branches.
However, spending using balance transfer cards is a counterproductive way of using them, so the Clubcard point offer is relatively hollow in this sense. For balance transfer purposes, Barclays and the Halifax are better options, though Tescoís card is still beneficial if it is solely used for this function.
MBNA Fluid Balance Transfer Card
MBNAís Fluid Balance transfer card is the cheapest short term card on the market at the moment, with a 12 month zero interest periods that is matched by a substantially small 0.75% handling fee. This means that for every £1,000 you transfer with this card, you only have to pay £7.50. However, this must be done within 60 days of you opening your account, so be wary of this if you pursue the acquisition of this card in the future. Users also get 3 month interest free purchase facilities, making this an excellent short term option for people.
If you are someone who believes their financial problems will only span a year, and are simply undergoing a tough time this winter, then this card may be better suited to you than Barclaycard or the Halifax as you will be charged less for transferring your fees, and can always move to a new deal after the 12 month period is over, if it arises that your problems span longer than first thought.
Things to remember
It is important to remember that 0% balance cards are excellent for shifting debt to, as you can enjoy making minimum monthly repayments without having to worry about your total debt soaring up. However, it is essential to not use the cards for spending or to take out further liabilities, as it is in this manner that they become exceedingly expensive and counter-productive in purpose.
Moreover, they are only worth retaining whilst their initial 0% offer stands, and when your deal comes to an end, you should either look for a new card or move onto a cheaper credit card. This is because the rate that these move up to after your introductory offer is over is substantially higher than many credit cards, and will result in your outstanding debt soaring up if your situation is left unaddressed.
The final key point to remember when using these cards is that it is pivotal that you at least make the required minimum repayment each month, as a failure to do so will likely result in the termination of your introductory rate, and a move to a substantially higher rate than you were enjoying before. This is because you will likely be given the card on the basis of your credit rating, and any missed payments will suggest to your creditor that you are not reliable enough to warrant being given 0% facilities with your debt.
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