Beat record credit card interest rates

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Beat record credit card interest rates
Beat record credit card interest rates



The average cost of credit card debt has increased to a record high of 20.6% APR, according to new research from Moneyfacts.

That's up from 19.9% last year.

One factor behind this rise is the cap on interchange fees which will be introduced in October. When you're making a transaction, your bank sends your payment to the retailer's (acquiring) bank and deducts a small fee. This is the interchange fee. It mostly covers operating services such as fraud prevention and customer call centres.

However, the European Commission is introducing a cap on these fees, which is denting the profitability of credit cards. It's already led to the withdrawal of some rewards credit cards, with Capital One and RBS scrapping their reward schemes, and is now helping to push up the interest rates charged too.

Beating the fees

Of course, if you pay your bill off in full every month, you won't have to pay any interest, no matter what rate your card carries. But if you need to pay your balance off in stages, you can still beat the fee rise by making use of a 0% credit card.

The top 0% balance transfer credit cards

If you have a big chunk of debt already on a credit card and need to pay it off in chunks, then check out the longest 0% balance transfer deals on offer today:

Credit card

0% period on balance transfers

Balance transfer fee

Cost of transferring £2,000 balance

Representative APR

Barclaycard 36 Month Balance Transfer Visa

36 months

2.49%

£49.80

18.9%

Virgin 36 Month Balance Transfer Credit Card MasterCard

36 months

2.50%

£50

18.9%

Halifax 36 Month Balance Transfer Credit Card MasterCard

36 months

2.90%

£58

18.9%

Bank of Scotland Platinum 36 Month Balance Transfer MasterCard

36 months

3.00%

£60

18.9%

Barclaycard Platinum 35 Month Balance Transfer Visa

35 months

2.39%

£47.80

18.9%

MBNA Platinum 35 Month Balance Transfer Visa Card

35 months

2.69%

£53.80

18.9%

Tesco Bank Clubcard Credit Card for Balance Transfer MasterCard

35 months

2.70%

£54

18.9%

Lloyds Bank Platinum 35 Month Balance Transfer Credit Card

35 months

3.00%

£60

18.9%


See more top balance transfer credit cards

The top low-fee 0% balance transfer credit cards

If you're happier with a shorter interest-free period, you could get benefit from a lower (or free) transfer fee:

0% period on balance transfers

Balance transfer fee

Fee paid on £2,000 transfer

Representative APR after 0% period ends

Santander 123 Credit Card*

23 months

None

£0

16.5%

Tesco Bank Clubcard 18 Month No Fee Credit Card

18 months

None

£0

18.9%

Halifax All in One Credit Card

19 months

1%

£20

18.9%

Barclaycard Platinum

24 months

1.15%

£23

18.9%

Virgin Money Balance Transfer Credit Card

26 months

1.25%

£25

18.9%

Barclaycard Platinum Balance Transfer Credit Card

28 Months

1.35%

£27

18.9%


*Annual fee of £24

The best 0% purchase credit cards

If you have some big purchases coming up in the near future, like a new boiler or a fridge, an interest-free purchase credit card might be the best bet:

Credit card

0% period

Representative APR

Santander 123 Credit Card MasterCard*

23 months

16.5%

Tesco Bank Clubcard Credit Card for Purchases MasterCard

21 months

18.9%

Clydesdale Bank Gold MasterCard

20 months

18.9%

Yorkshire Bank Gold MasterCard

20 months

18.9%

Halifax Purchase Credit Card MasterCard

20 months

18.9%

Sainsbury's Nectar Purchase Credit Card

19 months

18.9%

Lloyds Bank Online 19 Month Platinum Purchase MasterCard

19 months

18.9%

Bank of Scotland 19 month Platinum Purchase MasterCard

19 months

18.9%

M&S MasterCard

19 months

18.9%


*Annual fee of £24

Compare even more credit cards


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