Money Insider: Take a long view for 0% on your balance transfer

 

The battle between credit card companies striving to offer the longest zero per cent term for balance transfers shows no sign of fizzling out. The latest moves in this field means that it's now possible to borrow interest-free for 26 months if you meet the credit scoring criteria.

Just over a week ago Barclaycard was sitting comfortably at the top of the pile, occupying the first two places in the best buy tables with interest-free balance transfer terms of 25 months (2.9 per cent fee) and 24 months (2.8 per cent fee).

Then out of the blue Tesco Bank gatecrashed the party and launched 25 months with a 2.9 per cent fee and so was joint top with Barclaycard.

Within hours Barclaycard hit back with a record 26-month deal (3.5 per cent fee) and 25 months (new lower 2.80 per cent fee) to once again take control of the top two positions.

These moves have little to do with wanting to offer the customer a more attractive deal, the real driver is a marketing strategy to appear at the top of the best buy tables and get the volume of business that this delivers.

If you are financially disciplined, there are some good savings to be made. For example if you borrowed £3,000 interest-free with the latest long-term Barclaycard offer your only cost would be the £105 (3.5 per cent) balance transfer fee. If you paid £119.42 per month for 26 months the balance and fee will be cleared with no interest charges to pay.

By comparison if you wanted to clear a £3,000 balance on a card at the market average of 18.1 per cent APR in 26 months you'd have to pay £139 per month, some £509 more expensive than the 0 per cent deal above.

Just because the lenders look as if they are falling over themselves to offer long-term interest-free deals it doesn't mean they are easier to get hold of.

You will need a very good credit record to get the best deals and if yours doesn't meet the criteria you may be offered a shorter 0 per cent deal, possibly a higher interest rate and also a fairly small credit limit - others will be less fortunate and find their applications declined.

If you are accepted for one of these products, make sure you don't exceed your limit or miss a monthly payment as the lenders use this as a handy get out clause to terminate the introductory promotional deal on the spot.

Another tip for savvy borrowers is don't blindly opt for the card with the longest interest-free period unless you intend using it for the full term.

It's not uncommon for customers to switch to 0 per cent and then switch away again or repay the balance well before expiry, so for many people the balance transfer fee is also a key factor to keep costs to a minimum.

The one-off balance transfer fee is much cheaper if you opt for a term three or four months shorter than the table-topping cards. For example by picking the Lloyds TSB Platinum Card at 21 months the balance transfer fee is currently just 1.5 per cent or with the MBNA Platinum Card at 22 months it is 2 per cent, both well below the 3.5 per cent charged by Barclaycard on the 26-month deal.If youcan repay over a much shorter timescale, then the Nat West Platinum card has 13 months interest-free with a balance transfer fee of just 1 per cent.

When 0 per cent deals hit 20 months many people thought that was as far as they'd go, but with competition for those prized best buy slots as keen as ever, don't rule out a 30-month interest-free card by the end of the year.

Always shop around for that personal loan

Sainsbury's Bank is proud of its unique price promise with its personal loans, whereby if you can get a cheaper deal than the one agreed by Sainsbury's within 28 days it will match the rate and give you an additional 0.1 per cent APR discount.

Exclusive figures revealed to The Independent show that during 2012 customers taking advantage of this promotion cut their rate by an average of 1.77 per cent APR.

With the average loan under the price promise approximately £11,800 and a term of 53 months, many customers benefited to the tune of around £475 to £500 in lower interest charges.

This just highlights that it's worth shopping around when looking for a personal loan and not to plump for the first offer you receive.

Andrew Hagger is an independent personal finance analyst from moneycomms.co.uk

PROMOTED VIDEO
Arts and Entertainment
tv
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
Arts and Entertainment
Tracey Emin's 'My Bed' is returning to the Tate more than 15 years after it first caused shockwaves at the gallery
artTracey Emin's bed returns to the Tate after record sale
Environment
Neil Young performing at Hyde Park, London, earlier this month
environment
News
i100
News
Prince Harry is clearing enjoying the Commonwealth Games judging by this photo
people(a real one this time)
Sport
Lionel Messi looks on at the end of the final
football
Extras
indybest
News
Richard Norris in GQ
mediaGQ features photo shoot with man who underwent full face transplant
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Project Manager (HR)- Bristol - Upto £400 p/day

    £350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

    Graduate / Trainee Recruitment Consultant - IT

    £25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

    HR Business Partner - Banking Finance - Brentwood - £45K

    £45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

    PA / Team Secretary - Wimbledon

    £28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

    Day In a Page

    The children were playing in the street with toy guns. The air strikes were tragically real

    The air strikes were tragically real

    The children were playing in the street with toy guns
    Boozy, ignorant, intolerant, but very polite – The British, as others see us

    Britain as others see us

    Boozy, ignorant, intolerant, but very polite
    Countries that don’t survey their tigers risk losing them altogether

    Countries that don’t survey their tigers risk losing them

    Jonathon Porritt sounds the alarm
    How did our legends really begin?

    How did our legends really begin?

    Applying the theory of evolution to the world's many mythologies
    Watch out: Lambrusco is back on the menu

    Lambrusco is back on the menu

    Naff Seventies corner-shop staple is this year's Aperol Spritz
    A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

    A new Russian revolution

    Cracks start to appear in Putin’s Kremlin power bloc
    Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

    Apartheid’s sadistic killer that his country cannot forgive

    The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
    Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

    Standing my ground

    If sitting is bad for your health, what happens when you stay on your feet for a whole month?
    Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

    Greene prays for chance to rebuild after injury agony

    Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
    Israel-Gaza conflict: Secret report helps Israelis to hide facts

    Patrick Cockburn: Secret report helps Israel to hide facts

    The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
    The man who dared to go on holiday

    The man who dared to go on holiday

    New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
    Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

    Best comedians: How the professionals go about their funny business

    For all those wanting to know how stand-ups keep standing, here are some of the best moments
    The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

    The Guest List 2014

    Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
    Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

    Jokes on Hollywood

    With comedy film audiences shrinking, it’s time to move on