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HomeSave MoneyCredit Cards & LoansCredit CardsBest 0% credit cards for balance transfers

Best 0% credit cards for balance transfers

Jasmine and the Moneymagpie team
Brett L/Flickr

28/10/2011

0% balance transfer cards can be really good if you’ve got credit card debt to pay off – they let you do so without having to pay any interest.  Read on for our pick of the best 0% credit cards.

Who are these cards good for?

If you have an ongoing debt on a credit card that is currently charging you interest… then a 0% interest balance transfer card could really help you to clear the debt. However, it depends how much debt you have and what the interest is that you’re currently paying.

credit cards debtIf it’s a relatively small amount (say under £1,000) and the interest rate is below average (i.e. below about 17%) then you might be better off simply working to pay that debt off as fast as possible (see this article for tips on doing that). This is because all of the 0% deals charge you a small ‘handling fee’ (usually about 2.5-3%) to switch your balance over and that can wipe out any potential savings you might make.

Before applying for any credit card, you need to work out which one is best suited to your needs.  If you will use your card for spending rather than transferring debt, then go for a card that offers 0% interest on purchases (see this article for the best 0% purchase cards).

Also, depending on your credit rating and the debt you need to move, it could be better in the long-term to move to a card with a low life-time balance. Bear in mind that to get a good 0% balance transfer deal, you’ll need a really good credit record. Remember that if you apply for credit (either a card, loan, mortgage or even hire purchase) they will run a credit check on you. If you fail that check with one or two lenders that will harm your chances of getting credit elsewhere.

Should I apply?

Check your credit ratingIf you think your credit rating might not be up to scratch then check out your credit score before wasting an application. Remember that each time you apply for credit and get rejected you get minus points on your credit rating ‘scorecard’.

Get a FREE 30 day subscription to Creditexpert and check your score before applying (just remember to cancel it at the end of the free period if you don’t want to continue with a monthly subscription).

Best 0% interest balance transfers

The current top deals are:

Barclaycard 0% balance transferBarclaycard Platinum Card: this offers the longest 0% deal on the market, giving you a huge 22 months 0% interest.

Normally you pay a 3.2% transfer fee, but right now they are offering a refund which knocks the fee down to a very reasonable 2.9%. What’s more, if you transfer more than £3,000 to the card, you get a further £40 refund!

However to qualify for this card you must have an income of £20,000 or more. After the 0% period ends, the rate goes up to 17.5% representative APR.

Click here to apply.

Barclaycard Platinum Card

This offers the longest 0% deal on the market – a massive 22 months. Right now it also offers a really low transfer fee as well!

Click to find out more!

If you don’t have a minimum income of at least £20,000, there are alternatives:

Halifax matches the 22 months 0% interest, but carries a higher fee

The Halifax Balance Transfer credit card also offers 22 months at 0%, but it carries a higher transfer fee of 3.5% (plus it only allows you to transfer up to £3,000).

After the 0% period ends, the representative APR goes up to 17.9% APR.

Apply for the Halifax card here.

Virgin offers a (still hefty) 20 months 0% interest, and has a lower fee

Virgin balance transfer cardThe Virgin card still gives you a decent 20 months at 0%, and a lower transfer fee of 2.99% for debts put on in the first 60 days.

Also it’s representative APR after the 0% period ends is lower than the Halifax card – 16.8% rather than 17.9%.

Apply for the Virgin card here.

Other options

You can keep moving the money from card to card until you pay it off.

If none of these tickle your fancy, you can compare and choose more great balance transfer card offers here.  (Simply select ‘o% purchase’ from the drop-down menu on the top-left)

However its important to note that you have to pay a fee every time you transfer a balance. It’s usually not more than 3-4%, but if your are borrowing big amounts, then this can be a bit of a shock to the bank balance.

0% charity credit cards

MBNA offer a range of different charity credit cards 0% on balance transfers for 12 months and 3 months 0% on purchases (3% fee applies). By using one of these cards regular donations will be made to your chosen charity at no extra cost to you. How much is donated is based on your card usage. You can chose to donate to: The British Heart Foundation, Breakthrough Breast Cancer, WWF, National Trust, Dog’s Trust, or the RSPCA.

What to watch out for

The point of taking out a 0% balance transfer card is to make your debt cheaper and easier to pay off. So don’t use it to spend with! Credit card card companies have a very sneaky thing called negative payment hierarchy – it means that they pay off the cheapest debts you have first. So if you were to spend on the card, your repayments would be going towards the debt you’ve transferred at 0% and you’ll be charged interest on the purchases you make, which means more debt in the end.

Jasmine says...

Don’t be tempted to spend money on your 0% balance transfer card! Only use it to help shift your debt. Other types of card (such as 0% purchase cards) are a far better option for spending.

Once you have transfered your debt from another card – cut the old card up and close that account down. Don’t leave yourself the temptation of an empty card that you could just use to buy something you really don’t need and make your total debt even bigger.

It also goes without saying that you should never use a credit card to withdraw cash from a cash machine. The charges and interest rates for borrowing cash this way are insane and will very quickly plunge you into far more debt than you’re in now.

Remember how much interest you’ll be charged once the 0% period is up, and put everything into paying your debt off before then, otherwise you will have wasted an opportunity.

Useful links

4 Responses to “Best 0% credit cards for balance transfers”

  1. Dee says:
    July 21, 2011 at 12:10 pm

    Hi Jasmine, I hope you can help me. I lost my job in February and am finding it increasingly hard to keep on top of my bills. I have two credit cards one has interest of 19.9% and the other is reaching the end of the 0% period. I have tried and failed to get another card to transfer to. What can I do to get both debts transferred to a lower interest rate card?

    Reply
  2. Credit Cards Balance Transfers says:
    February 26, 2010 at 1:45 pm

    I don’t think the advice regarding cutting up credit cards and closing accounts is particularly helpful. When credit scores are assessed they take into account debt to limit ratios. Thus the more credit you have available (on unused accounts) in relation to your outstanding balance – the more favourably you’ll be scored.

    Reply
    • Jasmine Birtles says:
      February 26, 2010 at 2:46 pm

      I disagree totally. As lending criteria get even tighter lenders look at the amount of available credit you have when decided whether to lend and how much to lend. If they see that you have a large amount of money still available to you on empty credit cards that you have not shut down, they will lend much less.

      Reply
  3. Jorge Mintken says:
    February 18, 2010 at 4:06 pm

    This really is posting is generally incredibly helpful. it truly provide my family what im interested in.

    Reply

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