The selling point of a 0% balance transfer credit card is pretty clear. Rather than pay interest on my outstanding balance each month, I can pay a small fee (a percentage of my debt) to transfer the balance onto a card which won't charge any interest for a set period of time.
And you can get some seriously lengthy 0% periods, as the table below demonstrates.
But what if 28 months isn't enough? If you come to the end of your 0% period and there's still some debt to pay off, you could face something of a quandary. You either accept being charged interest on that debt until the balance is cleared, or shop around for a new 0% card. But there's no guarantee that you'll be able to get one. And you'll have to shell out on another transfer fee.
Perhaps you'll be better off going with a rate for life card.
MBNA Rate for Life
MBNA has launched the Rate for Life credit card, which charges a low rate of 6.9% for the entire life of any balance transfers made within 60 days of taking out the card.
So even if it takes you five years to clear the balance, you'll still never pay any more than 6.9% interest.
What's more, you won't pay a transfer fee on any balances you move over in that initial 60-day period.
Putting the Rate for Life to the test
Let's look at an example. You have £5,000 debt and can only afford to pay £150 a month towards it. On a typical credit card charging 18.9% interest, it would take you three years and nine months to pay the debt off, costing you £1,886 in interest
With the MBNA Rate for Life card, you won't pay a transfer fee. It will then take you three years to pay it off in full, paying £546 in interest. So you'll save more than £1,000 in interest and pay it off nine months quicker.
If you manage to bag the Barclaycard 28-Month Platinum Visa, then including the £175 transfer fee, you'll still owe just £975 at the end of the 0% period. If you don't manage to get another interest-free balance transfer card, you'll have to start paying interest at 18.9%, meaning it will take you another six months to pay off the balance, costing £54 in interest.
So the 0% deal is quicker and cheaper. You could be even better off if you manage to move that remaining debt to another 0% card.
But what if you can't get the top 0% card? What if your credit score is not quite perfect and the best you can get is 17 months with the Santander MasterCard? This card carries a 3% transfer fee, so you'll have to pay £150 to move your debt over.
At the end of the 0% period, you'll still owe £2,600 and face a 17.9% interest rate. That will take you another three years and eight months, costing you £1,746 to do so, £1,200 more than if you'd gone with the MBNA Rate for Life card.
To beat the Rate for Life card, you'd need to find an identical (or better) card to the Santander MasterCard to move the remaining debt to after 17 months. And there's absolutely no guarantee that such deals would even be available then.
Paying for more flexibility
The rate on offer on the MBNA Rate for Life card is lower than other low APR cards, but the fact that it only applies to balance transfers made within the first 60 days is rather limiting.
With the Sainsbury's Cashback Low Rate Credit Card for example, you will pay a higher rate of 7.8% on balance transfers, but those can be made at any time and you won't be charged a balance transfer fee. You can even earn cashback on the spending you do on the card.
Then there are the Low Rate Visa credit cards from NatWest and Royal Bank of Scotland. These charge just 2.9% on balance transfers for the first twelve months (with no transfer fee), followed by a rate of 9.9%.
It's also worth pointing out that interest rates on personal loans for smaller amounts (up to £5,000) paid back over up to five years are around the 6-7% mark, although the rate you will get will again depend on your credit rating.
Most complained about financial products
MBNA offers cheapest lifetime balance transfer credit card
Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship.
Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so.
To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension.
In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.