Virgin launches longest-ever 0% card - but is it cheapest?
Virgin Money has launched a 41-month 0% Balance Transfer Credit Card, making it the longest interest-free period on the market ever.
The war rages on between the top 0% balance transfer card providers, but is one of these cards right for you?
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 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. Many cards now charge around 2.5%, but there are a few that are significantly cheaper.
So when you're choosing a balance transfer card, you need to look at both the length of the 0% period and how expensive the fee is.
The new top card
Right now there are a whole host of providers offering 0% balance transfer periods of 40 months or more.
The Virgin 41-Month Balance Transfer Credit Card charges quite a hefty 4% transfer fee, making transfers significantly more expensive than its nearest rivals. The card offers a 41-month 0% period on money transfers too, so it's a cracking 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.
But could you get a much cheaper card, in terms of balance transfer fee, by sacrificing a month or two of 0% interest?
Let's take a look at the cards with the longest 0% offers to see how they stack up.
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 | 2.46% | £49.20 | 18.9% | |
MBNA Platinum 40-Month Credit Card | 40 months | 2.47% | £49.40 | 18.9% |
Sainsbury's Nectar Exclusive Long Balance Transfer Credit Card | 40 months | 2.48% | £49.60 | 18.9% |
40 months | 2.89% | £57.80 | 18.9% | |
39 months | 2.69% | £53.80 | 18.9% | |
39 months | 2.95% | £59 | 18.9% | |
Bank of Scotland Platinum 39-Month Balance Transfer Credit Card | 39 months | 2.95% | £59 | 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.
Work out how long you need to pay off your debt (possibly even add a month or two onto that). Here's the best deal for various 0% periods between 24 and 34 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 Clubcard 24-Month No Balance Fee Credit Card | 24 months | None | £0 | 18.9% |
30 months | 0.59% | £11.80 | 19.9% | |
32 months | 0.72% | £14.40 | 18.9% | |
34 months | 1.49% | £29.80 | 19.9% |
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.
