New 20-month balance transfer credit card deal
Just as MBNA and Virgin increase their 0% balance transfer deals to 18 months interest-free, Barclaycard has retaliated with a 20-month deal - albeit with a higher balance transfer fee. Which? Money's credit card expert Martyn Saville rates the new credit card deals.
Card one: BarclaycardThe new card from Barclaycard offers a 0% balance transfer deal of 20 months, the longest ever interest-free balance transfer deal in the UK.
If you're paying interest on existing credit card debt, this new card offers a great way to cut your interest repayments and therefore pay off your debt much quicker. The downside is that the card comes with an increased balance transfer fee of 3.2%. If you're likely to repay your whole balance within 18 months, you'd be better off with the MBNA card (see below). If you're looking for the longest possible balance transfer deal, though, the Barclaycard offer is hard to beat.
The card has a standard APR of 17.5% once the 0% deal comes to an end. It also offers 0% on new purchases for three months.
Card two: MBNAThe MBNA Balance Transfer credit card offers 0% on balance transfers for 18 months from account opening (when made within the first 60 days). It comes with a 2.88% handling fee, much lower than the 3.2% fee imposed by Barclaycard. The card has a representative interest rate of 16.7% APR variable.
If you think you'll pay off your bill within the 18-month promotional period, this deal is the best currently available.
The card also comes with a three-month 0% deal on new purchases. However, you should avoid using this card for new purchases due to the way MBNA allocates repayments to your account (see below).
Card three: VirginThe Virgin credit card also offers 0% on balance transfers for 18 months if the transfer id made within the first 60 days. The deal comes with a 2.89% handling fee, making it cheaper than the longer Barclaycard offer and only a whiosker above the MBNA deal.
The card comes with 0% on purchases for three months and a standard APR of 16.8%.
Why you shouldn't use the MBNA card for new purchasesWe have discovered that if you take out any 0% balance transfer deal with MBNA and the card also has an initial 0% on purchases deal, which would expire first, you could end up paying interest on your purchases unnecessarily.
Under credit card repayment rules, all card companies allocate your repayments against the most expensive debt first. If two balances have the same interest rate (eg 0% on both purchases and balance transfers), most card providers allocate your payment to the 0% deal that will expire first.
New 20-month balance transfer credit card deal - March - 2011 ...
Just as MBNA and Virgin increase their 0% balance transfer deals to 18 months interest-free, Barclaycard has retaliated with a 20-month deal - albeit with a higher balance transfer fee. Which? Money's credit card expert Martyn Saville rates the new credit card deals.
Card one: BarclaycardThe new card from Barclaycard offers a 0% balance transfer deal of 20 months, the longest ever interest-free balance transfer deal in the UK.
If you're paying interest on existing credit card debt, this new card offers a great way to cut your interest repayments and therefore pay off your debt much quicker. The downside is that the card comes with an increased balance transfer fee of 3.2%. If you're likely to repay your whole balance within 18 months, you'd be better off with the MBNA card (see below). If you're looking for the longest possible balance transfer deal, though, the Barclaycard offer is hard to beat.
The card has a standard APR of 17.5% once the 0% deal comes to an end. It also offers 0% on new purchases for three months.
Card two: MBNAThe MBNA Balance Transfer credit card offers 0% on balance transfers for 18 months from account opening (when made within the first 60 days). It comes with a 2.88% handling fee, much lower than the 3.2% fee imposed by Barclaycard. The card has a representative interest rate of 16.7% APR variable.
If you think you'll pay off your bill within the 18-month promotional period, this deal is the best currently available.
The card also comes with a three-month 0% deal on new purchases. However, you should avoid using this card for new purchases due to the way MBNA allocates repayments to your account (see below).
Card three: VirginThe Virgin credit card also offers 0% on balance transfers for 18 months if the transfer id made within the first 60 days. The deal comes with a 2.89% handling fee, making it cheaper than the longer Barclaycard offer and only a whiosker above the MBNA deal.
The card comes with 0% on purchases for three months and a standard APR of 16.8%.
Why you shouldn't use the MBNA card for new purchasesWe have discovered that if you take out any 0% balance transfer deal with MBNA and the card also has an initial 0% on purchases deal, which would expire first, you could end up paying interest on your purchases unnecessarily.
Under credit card repayment rules, all card companies allocate your repayments against the most expensive debt first. If two balances have the same interest rate (eg 0% on both purchases and balance transfers), most card providers allocate your payment to the 0% deal that will expire first.
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