Is your credit card really 0%?

0% Credit cards stacked up on top of each other

Whether you like to stick a cheeky little holiday on your credit card, or you are just very astute to make use of the interest free borrowing option, 0% credit cards do not always stack up to provide great value.

In fact you could often end up wasting money if you opt for the longest 0% balance transfer credit card offer. We take a closer look at why that is.

Whilst you can get a 36-month balance transfer card, the fees for the longest monthly offers are now starting to rise, and not only that but if you’ve got £5,000 of debt, you’ll now pay almost £125 to transfer it onto the cheapest 36-month card.

The key is to finding a card where the term for 0% interest is shorter, and therefore so is the transfer fee.  This just means that you need to switch your card to another supplier a 0% Credit cards layed on a tablelittle bit sooner.  If you don’t pay back the debt within the 0% period though, just be aware that your interest is probably going to end up around 19% or even more.

Whereas in the past people with the best credit rating would simply apply for the longest offer on the market, nowadays you’ll usually be better off looking on page two of the best buy tables.

Here are the longest balance transfer cards, and the cheapest.

What are the costs?

As we have already mentioned, most cards will come with a debt transfer fee, which can be as much 3% of the transferable debt.  Make you sure you add these charge in to your calculations when considering your overall repayments.

As you can see from the table below, the longest cards tend to charge between 2% to 3%, but we have found some cards that don;t charge anything to transfer, just with a shorter 0% interest period.

Credit card 0% period on balance transfers Balance transfer fee Cost of transferring £1,000 balance Representative APR after 0% period ends

All in one

30 months

£3 monthly fee

0% £0 21.7%
Sainsbury’s Bank

Nectar Purchase credit card

29 months 0% £0 19.9%
Barclaycard Platinum Purchase 27 months 0% £0 19.9%
Virgin Money 36 Month Balance Transfer Credit Card  36 months 2.8% £28 20.9%
Barclaycard Platinum 35 Month Balance Transfer Visa 35 months 1.85% £18.50 19.9%
Post Office Money Balance Transfer Credit Card 35 months 2.85% £28.50 18.9%
Lloyds Bank Online Platinum 35 Month Balance Transfer Mastercard 35 months 3% £30 19.94%

So as you can see it’s definitely worth taking a look at some of the cards that offer a shorter interest period to obtain a zero transfer fee.

By opting for a 30 month card over a 36-month one, your fee could plummet from 3% to just 0%. In cash terms, that means your bill for switching £5,000 debt would be £125 difference!

If you aren’t able to clear your debt in the 30 months, just make sure you remember to switch again to another 0% card.

Is your credit rating getting in the way?

Sadly, some people won’t be able to get any of the cards we’ve highlighted in this article. That’s because you need a good credit rating to be accepted for the credit.

If this is the case, take a look at the list of cards which have a higher APR at the end of the 9% interest period.

Card Starting credit limit range Maximum credit limit 0% balance transfer Balance transfer fee 0% purchase period APR
Barclaycard Platinum 18 Month Balance Transfer Credit Card Subject to status Subject to status 18 months 2.99% 3 months 24.9%
aqua Classic With 6 Month Balance Transfer £250 – £1,200 Subject to status 6 months 3% 29.7%
aqua 6 Months Purchase Credit Card £250 – £1,200 Subject to status 6 months 34.9%
Barclaycard Initial with 3 Month Purchases Credit Card £150 – £1,200 Subject to status 3 months 34.9%

As you can see the Barclaycard Platinum 18 Month Balance Transfer Credit Card offers the best 0%.

Hopefully from this article you can find a card that’s right for you, and in the process have saved a little bit of money.  0% interest credit cards basically allow us to debt around, but more importantly take advantage of 0% borrowing.

Just be careful that whenever you are using credit cards to manage money, that you don’t take it out drinking with you on a Friday night!

We strongly advise using a money comparison site for making any decision when it comes to choosing a credit card or other financial product.

Dave Hartcliffe

High & Wise

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Author: highandwise

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