Best Balance Transfer Cards Zero Transfer Fee

Credit card competition hots up

Credit card providers are engaged in fierce competition over the length of 0% balance transfer deals.

Providers are increasing the time period of 0% interest on debt that customers switch from other cards, with one extending it to 20 months.

Competition has picked up after providers scaled back these offers during the recession.

However, financial groups are warning customers to take care over the small print of such deals.

The average length of 0% interest balance transfer deals on the top five credit cards was now 17.8 months, up from 15.2 months in March last year, according to financial website Moneysupermarket.com.

This was the longest period recorded, it said.

However, fees are charged for such deals, and consumers are being urged to check the details of the interest rate to be charged when the 0% deal comes to an end.

Kevin Mountford, from Moneysupermarket, warned that not everyone would be eligible for the deals.

"This competition is welcome news for those consumers who are in a position to take advantage of this price war and consolidate any existing credit card balances on to cheaper deals," he said.

"However, consumers need to be aware that most lenders are giving these deals to customers who have excellent or good credit histories.

"If you fall outside of this category then you may find your options are more limited. Before applying for a credit card, consumers need to check their credit profile and make sure there is no adverse information that would jeopardise their chances of being accepted."

Chris Griffiths, from website Confused.com, said: "To ensure you keep your 0% you will need to stay within the terms and conditions of the account or risk losing any introductory offer.

Credit card competition good news for consumers

Competition is returning to the credit card market with the launch of record breaking new deals from lenders.

Barclaycard trumped the rest of the field with the launch of a new 20 month 0% balance transfer period, the longest ever offered in the UK.

The announcement was made hours after MBNA and Virgin Money announced they were upping their balance transfer period to 18 months, the length previously offered by Barclaycard.

Both companies went straight to the top of credit card “best buy” charts as they charge relatively small balance transfer fees.

Lenders appear to be shrugging off the cautious mentality that saw them scale back lending after the financial crisis. The average balance transfer deal on the top five cards now stands at 17.8 months, up from 15.2 months in March last year.

Consumers are being warned to check the small print on such deals to make sure they fully understand the costs involved. The Barclaycard offering charges a 3.2% balance transfer fee, up from 2.9% on what was charged on the previous deal, while the MBNA and Virgin deal charges 2.88%.

Borrowers should also make sure that understand what their interest rate will revert to at the end of the interest free period.

Kevin Mountford, head of banking at Moneysupermarket.com, said: “In February, we saw providers launch a number of attractive credit card deals which well and truly showed their appetite to lend has returned. However, Barclaycard has taken this competition to a new level with the launch of the UK’s first 20-month balance transfer card. I wouldn’t be surprised to see other lenders react accordingly by launching similar deals, but with so many vying to go top of the best buy tables, we could see even longer deals emerge.”

He went on to warn that although lenders appeared to be gaining confidence, the best deals are still only available to those with good or excellent credit scores.

“This competition is welcome news for those consumers who are in a position to take advantage of this price war and consolidate any existing credit card balances on to cheaper deals. However, consumers need to be aware that most lenders are giving these deals to customers who have excellent or good credit histories. If you fall outside of this category then you may find your options are more limited. Before applying for a credit card, consumers need to check their credit profile and make sure there is no adverse information that would jeopardise their chances of being accepted,” he said.