Sainsburyís Bank release 12-month 0% balance transfer card with market leading transfer fee of just 0.5%
Sainsburyís Bank has released a 12-month 0% balance transfer card which comes with a market leading transfer fee of just 0.5%.
The astonishingly low transfer rate means that a card holder would only be necessitated to pay £5 to transfer a balance of £1000 to the Nectar Low Balance Transfer Fee Credit Card, which was officially released to the market earlier this month.
The new deal has outstripped the previous market-best balance transfer card offered by Tesco Bank by a monumental 0.15 percentage points, and also comes with the added bonus of granting card users the ability to make 0% purchases with the card in the first 12 months of the deal.
Moreover, users of the card can also double obtain nectar points by spending with the card, with some customers now able to earn as much as 4 points for each £1 they spend, though they will need to use both their Nectar card and new balance transfer card to do so- 2 points for each £1 spent on each one separately.
However, after the promotional 12 month zero interest period comes to an end, card holders are moved to a far higher rate of 18.9% APR, meaning that the card is only relevant to individuals who are suffering short term financial difficulties and believe they can clear the balance in a year, with other more long term zero per cent deals with higher transfer fees available to people with more severe financial problems.
The new deal has seen Sainsburyís take a different line of marketing to attract customers than other mainstream providers such as Barclay, who have consistently focused on raising the length of 0% deals in order to capture the attention of consumers.
Last month Barclays released an all-new card which allows users to place their debt into an account with no interest for almost three years, though many financial experts have advised that such long term cards are simply not necessary for many people who should instead opt to find a shorter deal with a smaller fee to address their financial problems.
Sainsburyís transfer fee of 0.5% is substantially better than many of rates on offer with many of the other market leading balance transfer card deals, which typically stand between 2.8% and 3% and users of the new Nectar Low Balance Transfer Fee Credit Card could find themselves saving £125 on a £5,000 debt- though is only applicable if the account holder pays off their outstanding balance during the 0% period.
The lower transfer rate reflects the lower zero per cent interest period which the card comes along with and for many choosing to consolidate their debt in a shorter deal will put more impetus on them to clear their balance early and save money in the long term.
As with most zero per cent interest credit card deals, users will lose their promotional offer unless they make at least the minimum monthly payment toward repaying their debt each month, and it is advised that if you are accept to obtain this deal that you set up a direct debit with the bank in order to ensure that you always meet your payment dates on time and are not at risk of losing your zero per cent deal.
Moreover, the popularity and widespread usage of balance transfer cards means that card providers will be hugely selective about who they give the card out to because they are able to pick the best of the bunch firm in the knowledge that they will always have a solid customer base. As such, if you are aware you have a poor credit rating then it would be more beneficial to devote some months to improving your credit history and applying in the future rather than pursuing a card at present because the reality is that you will not be accepted and this will have an adverse effect on your credit rating.
However, those who are accepted for the deal will be boosted by the news that the Bank has pledged to provide all card holders with the headline rate they advertise, compared to the 51% of card holders who obtain the headline rate on offer across the industry.
Other cards to consider
There are many other attractive balance transfer cards on offer at present, both long and short term that will benefit people of widely ranging circumstances.
The next best short term balance transfer card is being provided by Tesco Bank, with their latest card coming with a 0.65% transfer fee. The card is similar to Sainsburyís newest offering and comes with a 12 month 0 per cent interest period which has attracted a lot of interest in recent times.
For people who are seeking longer term deals, the Bank of Scotlandís Platinum Balance Transfer Card or Lloyds Platinum Credit Card are both attractive propositions which come with an extended 15 month zero interest period and a competitive fee of just 0.7% with half a year of 0% interest on purchases as well.
Both offer initial rates of 3% but these are later reduced to 0.7% providing card holders transfer their balance to accounts within 90 days of signing up.
And for those in severe financial hardship at present who are either unemployed or do not see a steep pick up in their wages in the near future there are long term options on offer from Barclays and Halifax which are available at present.
In particular, Barclayís new 32 month Extended Platinum Balance Transfer card and 31 month Platinum Balance transfer cards come with low fees of just 2.89% and might be well suited to people suffering severely at present, whilst Halifax and MBNA have 31 month and 30 month deals at present which might also be worth considering.
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