|
By Rachel Preece
Staff Writer, 21 August 2008
THE competition is hot, but do you know who offers the longest 0% balance transfer period?
Armed with the right information about the longest 0% balance transfer credit card deals available, and you could be saving a fair bit of money by avoiding interest charges.
With the balance transfer credit card market heating up, now is the time to check out the latest 0% balance transfer credit card deals. With Capital One, Virgin and Barclaycard all striving to lead the pack, how do you know which credit card company could be offering you the best deal?
Do you know how much you could be saving?
More and more people are choosing to take advantage of balance transfer offers, and with 0% deals now lasting for as long as 16 months, you could be saving a fortune.
Without ridiculous interest rates burning a hole in your wallet, you can use the 0% balance transfer period to pay off as much of your balance as possible. And that's just it - you'll be paying off your debts without accruing ANY interest charges.
Balance transfer credit card deals offer a win win situation, but it's still necessary to shop around and compare credit cards.
Compared with credit cards with standard interest rates, a 0% balance transfer credit card deal can save you hundreds.
For example, if you owed £2,500 on a standard credit card, your minimum monthly repayment would be around the £80 mark. To repay this balance, it would take you 3 years and 5 months and you will have paid £737 in interest charges.
If you wanted to repay the same amount on a standard credit card – but this time within 14 months, your monthly repayments would be around £185. Although it would take you just over a year to pay off this balance, you would still have incurred a whopping – and unnecessary £270 in interest.
If you simply transferred your £2,500 to a 0% balance transfer credit card, this would cost you £75 for the balance transfer fee, but you would still save a massive £195. The more you transfer, the bigger the transfer fee – but, the more you save.
Obviously, with a 0% balance transfer credit card deal, you pay no interest - which means you end up paying back your balance far quicker than with a standard credit card - meaning it benefits you financially, and makes your life easier by shifting those debts faster.
How to compare 0% balance transfer credit cards
There are a few things you need to look out for when you compare 0% balance transfer credit cards.
The most important thing to check out is the length of the 0% balance transfer deal. It goes without saying that you should look for the longest 0% balance transfer period available, especially if you have quite a large balance to pay off.
If you think that you just have too much to pay off comfortably in 16 months, it might be worth checking out the life of balance transfer credit cards for a better deal. These offer a low interest rate for the life of the balance, which means you don’t have to worry about transferring the balance again or accruing a lot of interest.
With regard to 0% balance transfer credit cards, the Capital One Balance Transfer and Purchase credit card offers the longest 0% balance transfer period at present - at an amazing 16 months.
Just behind Capital One sits the Virgin credit card, offering 15 months at 0%.
The Barclaycard Platinum with Balance Transfer credit card also offers a 0% balance transfer period of 15 months, and the credit card gets full marks for its security features and cardholder services, including some fantastic discounts with Thomas Cook and free travel insurance.
However, the Virgin credit card comes with exclusive Virgin discounts, so although the 0% balance transfer period is the same, there are a host of other offers to weigh up.
Once you've chosen a balance transfer credit card with deals that are right for you, there are still a few things to note.
There may be several balance transfer credit cards offering the same 0% period, but some may charge higher transfer fees than others.
At the moment, the GM credit card offers the lowest balance transfer fee, at just 2%, but the 0% balance transfer period is just for 5 months (however, if your balance isn't very big, this may be ideal). Always check to see whether a credit card company can offer you a lower balance transfer fee than another.
There are currently three credit cards offering no balance transfer fee whatsoever, although they are all on 'low rate' not 0% deals. Compare no fee balance transfer credit cards here.
What to watch out for
It's a bad idea to use your balance transfer credit card to spend, and it's worth getting a different credit card to make purchases.
If you spend on your balance transfer credit card, you'll be undoing all the good of the 0% deal. Because credit card companies put repayments towards debts that aren't earning them money first (in other words, the transferred balance), you will be left accruing interest from your purchases at a pretty high rate.
If you do want to spend on the same credit card, then check out the 0% balance transfer and purchase credit cards.
Who's best for 0% balance transfers?
Capital One, Virgin and Barclaycard are the forerunners, offering the longest 0% balance transfer deals available and all coming with some fantastic extra features.
The Egg credit card remains a favourite too, and comes with discounts to use with Dixons, Lastminute.com and others.
Who's best for 0% balance transfers and new spending?
If you want to keep your wallet as light as possible, and life as simple as possible, then it's worth considering a 0% balance transfer and purchase credit card.
Capital One are leading the pack here too, with their Capital One Platinum credit card. With 0% on balance transfers and purchases for 15 months, this is one of the best balance transfer credit cards available.
Overall, 0% balance transfer credit cards are a brilliant invention. With some companies offering well over a year of no interest, you can pay off your debts comfortably - with some fantastic additional bonuses too, such as free travel insurance, store discounts and fraud protection.
 Credit Card Comparison
Credit Card Guide
Credit Card Guides
|
