New Year is a time for reflection, evaluation and improvement, and this should certainly be true with your own personal financial situation.
Christmas is a notoriously expensive season to try and navigate your finances through, and the reality is that we all have a propensity to overspend and leave ourselves a bit short come January. So what options are available to you if you fall into this category?
There are a number of new balance transfer deals on the market that might be ideally suited to your situation if you overspent during the festive season. In particular, Barclays, Tesco and Santander have begun offering zero interest, long term balance transfer cards that are most certainly worth looking at if you are looking to retake control of your financial situation. Conversely, the Santander credit card for purchases offers a altogether different function that its balance transfer counterparts, but nevertheless has a number of merits that might be highly beneficial in assisting you get your finances back on track.
Barclaycard- 0% balance transfer for 30 months
Last week, Barclays launched its 0% balance transfer Barclaycard that has an introductory deal that spans 30 months. This makes it the longest running balance transfer card on the market at the moment, and has a competitive 2.89% balance transfer handling fee to go along side it.
The card also has a highly attractive 0% purchase offering, enabling users to pay zero interest on their purchases for 6 months when they first acquire the card. When the period comes to an end, users will have to pay 18.9% interest on outstanding balances, so it is essential you pay off your purchase balance during the 6 month introductory period or else your payments afterwards will go towards interest on purchase repayments, rather than on the balance transfer credit.
The card also rewards those who make their intended balance transfer on the date of their application, and could potentially save you over £1000 if you act fast. The card is perfect for those who have spent too much over the festive season and wish to be given some vital breathing space to regain their financial standing. By making monthly repayments that remain the same for over two years, and at a relatively low value, you could be able to regain control of your financial situation and tailor your repayments in the most affordable way for you.
Tesco Clubcard Credit Card
Another long term balance transfer card is the Tesco Clubcard Credit card that offers 0% interest on balance transfers for a period of 29 months. The card has a slightly higher balance transfer fee than the Barclaycard, though the 2.9% is hardly something that is hugely detracting. Furthermore, you receive bonus Clubcard points when using the card in Tesco stores, so it might be highly beneficial if you are a frequent shopper there.
The card also offers 0% interest on purchases for the first three months, but it is far more suited in its balance transfer function as payments become conflated when the introductory periods are in different time spans. Nevertheless, the card is the second longest balance transfer card out on the market at the moment, and its competitive interest rate and club point capacity make it an essential consideration if you wish to acquire a credit card in the near future.
MBNA Platinum Credit Card
The MBNA Platinum credit card grants userís a 29th month period for 0% balance transfers, as well as enabling them to make 3 months worth of purchases with 0% interest. There is an initial balance transfer fee of 2.89% which you must pay, which is slightly better than Tesco and pretty competitive. However, unlike the Tesco Card, you must make the balance transfer within 60 days of you opening the account as you will be unable to do so after this period.
Balance transfers from current accounts are more expensive with this card, and at 4% it is quite expensive to make overdraft transfers with this card. After the 3 month purchase period and 29 month balance transfer deal come to an end, you will have to pay 18.9% interest on the outstanding balances that you have. Because of the disparity in the time lengths the deals run for, it is recommended that you use the card for a singular function, rather than for both purchases and balance transfers. This is because once your 3 month purchase period comes to an end, you will have to clear that before you can start paying off your balance transfer, and you might be unable to get back on track financially in this way.
Santander Credit Card for purchases
If your need for a credit card extends beyond just consolidating debt via a balance transfer, then the Santander credit card for purchases might be worth considering. Not only does the card grant you 0% interest on balance transfers for the first 9 months of your account holding, it also bestows upon you 0% interest on purchases you make with the card for a period of 18 months. Any balance transfers come with a 3% transfer fee and you will have to strictly abide to the repayment terms and conditions or else risk forfeiture of any special offers that were attached to your initial deal. The credit limit on the card is £1200, so obviously for larger purchases you will have to go elsewhere.
The card is undoubtedly better in a purchase card function as it can help you afford that one expensive purchase that you have wanted to make, but have failed to do so because you have not been able to envisage affording the monthly repayments with interest. The balance transfer offering is a little more chequered because your monthly repayments will be paid to your most costly debt, thus if you make a purchase and use the card for a balance transfer, you will have to clear the full balance of the transferred debt before you can start paying off your purchase credit. For this reason, the card is better functioning in one of the two roles, rather than with both.
Considering the relatively poor purchase card offerings on the market at the moment, the Santander credit card must be regarded as an essential if you aspire to make a large purchase in the future and are in need of spreading the financial burden of it.
Once your term is over, the interest rate for borrowing is set at 18.9% APR, which is a pretty modest deal. For this reason it can be argued the optimum usage of this card consists of utilising it for a one of large purchase or to make payments during a month where you are particularly struggling financially. You should also avoid taking money out the cash point with this card, at this incurs a monumental 29.8% interest charge for each withdrawal you make.
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