Battle to offer cheapest long-term 0% credit card hots up
Sainsbury's has launched the cheapest balance transfer credit card on the market with a 0% offer of at least 40 months.
The Sainsbury's Nectar Long Balance Transfer Credit Card is interest-free for 40 months with a fee of just 2.42%, making it marginally cheaper than the Halifax 40 Month Balance Transfer Card, which comes with a 2.46% fee.
The catch is you'll have to own a Nectar card to qualify for Sainsbury's offer, or you'll be charged a higher 2.89% fee.
Nonetheless, it's clear that competition in the 0% balance transfer card market is showing no sign of easing off. But is one of these credit cards right for you?
Fee vs 0% offer
It's easy to compare credit cards that offer interest-free periods on purchases. All you need to know is how long the 0% period is – the longest offer will be the best card.
However, things are more complicated with 0% balance transfer credit cards. Generally speaking, these are great products.
You can move an existing credit card debt to a new card and then not pay any interest on that debt for a long period.
The problem is you will usually have to pay a balance transfer fee up front. This is a percentage of the debt you're transferring to your new balance transfer card.
This varies from one provider to the next – some charge nothing at all, while others charge a hefty 4% of the total debt transferred.
So when you're choosing a balance transfer card, you need to compare both the length of the 0% period and how expensive the fee is.
A good example of this can be seen in the fact that the longest balance transfer offer on the market probably isn't the cheapest overall.
The Virgin 41-Month Balance Transfer Credit Card is the only card to offer 41 months interest-free. However, it charges quite a hefty 4% transfer fee, making transfers significantly more expensive than its nearest 40-month rivals, which we mentioned above.
The card does offer a 41-month 0% period on money transfers as well, however, so it's a good choice if you have an overdraft that you need to clear. Note that you'll have to pay the 4% fee on money transfers too.
0% balance transfer cards with long interest-free periods
Let's take a look at the cards with the longest 0% balance transfer offers to see how they stack up. This table is ranked purely on length of offer.
Credit card | 0% period on balance transfers | Balance transfer fee | Cost of transferring £2,000 balance | Representative APR after 0% period ends |
41 months | 4% | £80 | 20.9% | |
40 months | 2.42% | £48.40 | 18.9% | |
40 months | 2.46% | £49.20 | 18.9% | |
40 months | 2.69% | £53.80 | 18.9% | |
MBNA Platinum 40 Month Credit Card | 40 months | 2.79% | £55.80 | 18.9% |
40 months | 2.85% | £57 | 18.9% | |
Bank of Scotland Platinum 40-Month Balance Transfer Credit Card | 40 months | 2.85% | £57 | 18.9% |
0% cards with low balance transfer fees
However, if you're willing to go for a card with a shorter interest-free period, you can pay a much lower fee or even no fee at all, as the table below shows.
Here are some of the best deals for various 0% periods between 24 and 37 months.
Credit card | 0% period on balance transfers | Balance transfer fee | Cost of transferring £2,000 balance | Representative APR after 0% period ends |
Halifax 24-Month Balance Transfer Credit Card / Tesco Bank Clubcard 24-Month No Balance Transfer Fee Credit Card | 24 months | None | £0 | 18.9% |
30 months | 0.59% | £11.80 | 19.9% | |
32 months | 0.68% | £14.40 | 18.9% | |
34 months | 1.49% | £29.80 | 19.9% | |
37 months | 1.5% | £30 | 18.9% |
Just make sure you weigh up how long you'll need to pay off your debts. It's better to have longer at 0% interest and pay a slightly larger fee than run out of time and end up paying interest.
Average credit rating
Sadly, some people won't be able to get any of the cards we've highlighted in this article. That's because the credit card companies are only willing to give these cards to people with good credit ratings.
Other options
If you want even longer to get back into the black, you could apply for a personal loan and use the money you've borrowed to pay off your credit card debt. Right now, the top personal loans are charging as little as 3.2% in interest.
0% is best
But if you can get one of the top 0% cards, go for one of them. Just make sure you pay off your minimum monthly repayment promptly every time. Otherwise your credit card provider will use your late payment as an excuse to withdraw your 0% deal.
