Money Insider: Zero isn't always a hero when it comes to credit cards


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The Independent Online

Obsession with long-term 0 per cent balance transfer deals means excellent all-round credit cards get overlooked.

The balance transfer sector of the credit card market continues to enjoy high-profile coverage and dominates the best buys.

Unfortunately this often means that more suitable, good value long-term alternative credit cards are being overlooked by consumers.

If you're looking for a new credit card, all the adverts and price comparison best buys will do their utmost to point you towards the longest 0 per cent deals on the market.

This behaviour appears to be driven more by lucrative commercial arrangements on offer from the card providers. There seems to be little appetite from money websites to promote a wider range of card products suitable for those not in the market for a zero per cent deal.

While interest-free plastic can save you a small fortune in interest costs if used wisely, there are also some very solid all-round credit cards on the market that rarely get a mention due to the obsessive focus on the zero per cent balance transfer sector.

You can easily get 30-month terms on free credit on balance transfers, but the longer the deal the higher the balance transfer fee – now hitting 3.5 per cent in some cases. Another issue often overlooked is the "go to" rates when the introductory deal finishes. In some cases these are approaching 20 per cent APR . If you're the sort of person that takes advantage of the 0 per cent period and then moves on to another card and repeats the process then that makes financial sense, but if you're looking for a card to remain in your wallet for the longer term, there are options with more benefits and a lower interest rate.

The cards from Halifax Clarity at 12.9 per cent APR, MBNA Everyday 13.9 per cent and Nationwide BS Select 15.9 per cent won't appear at the top of the best buys, but when you weigh up the sum of the component parts, these cards offer a range of benefits and excellent long-term value.

They have a long-term interest rate at well below the market average of 18 per cent APR as well as features you won't find on specialist 0 per cent cards, but if you relied on the information in many of the best buy tables you wouldn't even realise they existed.

How TSB is truly doing something different

The UK banking sector faces a long struggle to shake off its tarnished reputation, with the PPI mis-selling scandal, rate-rigging, six-figure bonuses or branches being closed. New banks have accepted something has to change, and this week TSB launched its Truth and Banking campaign, with a short animation to tell customers how the bank makes its money and how it is used.

It's refreshing to see openness in this sector, so let's hope these words are matched by actions in the months ahead – it could be a blueprint for success.

Andrew Hagger is an independent personal finance analyst from

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