A new deal for travellers...
Abbey kicked off the recent spate of activity by re-launching its Zero Card. The card is a favourite among travellers as it offers fee-free purchases and cash withdrawals abroad, as well as a 0% rate on balance transfers for 12 months, with a 3% fee applicable. You should avoid using the card to withdraw money from an ATM as even though no fee will be charged, you will attract interest at a rate of 27.9%, compared with a standard rate of 18.9% on purchases.
Also, if you plan to use this card while you're on holiday don't be tempted to make use of the balance transfer offer. Like most card providers, Abbey uses a repayment system where the cheapest balance is cleared first. So your monthly payments will go towards clearing the transferred balance and you won't start repaying any spending you've made on the card until that transferred debt has been totally repaid.
The move from Abbey followed Nationwide's decision to charge foreign-usage fees on its credit and debit cards for the first time. The card now charges a 0.84% foreign loading fee for cash withdrawals and purchases outside Europe and by July this will increase to 1%.
So the reappearance of the Abbey Zero Card is well-timed for consumers looking to get away this summer. They do have an alternative in the Post Office Credit Card however, which has no fees on foreign purchases although it does charge 2.5% on cash withdrawals.
A new deal for spenders...
While Abbey leapt back into the favour of travellers, Tesco's Clubcard Credit Card looks to be a huge hit among cardholders wanting to spend in the UK.
The Tesco card became the market-leader for purchases with its 0% interest rate offer leaping from six months to 12 months. It also has one of the most competitive balance transfer rates charging a very low 2% balance transfer fee and offering 0% interest for six months. As an added bonus, customers collect five Clubcard points for every £4 spent at Tesco. On the downside, its annual percentage rate (APR) has increased from 15.9% to 16.9%.
The next best is Marks & Spencer Money's credit card which offers a 10-month interest-free period on purchases.
Those with existing debts who want to keep on spending should consider the Halifax All in One Card, which offers an equal 0% rate of nine months for both purchases and balance transfers helping you avoid the payment trap, which is explained above, but which Clare Francis also talks about in her article '10 financial traps to watch out for'.
New deals for those in debt...
Those who have built up existing debts on credit or store cards can benefit by moving the balance to a 0% balance transfer card - the length of the introductory period gives you time to pay back the debt without accruing further interest.
Clearly therefore, the longer the 0% deal the better and Virgin has once again stretched its balance transfer period to 16 months making it a clear market leader with a 2.98% fee and a rate after the 0% period expires of 16.6%. Its nearest rivals are the NatWest and Royal Bank of Scotland Platinum Cards and the HSBC Bank Credit Card, all of which offer 0% for 15 months with a 2.9% fee and a typical rate of 16.9%. However, these cards are only available to existing customers with these individual banks.
However, with finances tight and people looking to minimise their debt wherever possible, the Barclaycard Platinum is attracting attention. Its interest free offer applies for 12 months from account opening and it has a lower typical rate of 12.4%. However, much of the appeal of this deal is that its balance transfer fee has been cut from 3% to 2.5% making it one of the lowest fees among all of the 0% balance transfer cards.
And something for those who want rewards...
If you clear your balance in full each month, why not consider a card that rewards you for spending.
Barclaycard has launched a new Goldfish credit card which gives customers £30 of reward points if they spend £100 a month for the first three months. They then earn one point for every £1 spent. Rewards can be exchanged for vouchers which can be redeemed at a number of high street retailers and nationwide chains including Boots, Marks & Spencer, Pizza Express, HMV, Waitrose, Argos and Debenhams.
The APR is 9.9% which is significantly lower than the rate of interest levied on many other cards. However, the interest you are charged if you don't clear your balance in full, still outweighs the value of any reward points you'll accrue, so this type of card should only be used by those who do pay their bill off each month.
Another attractive reward card is the American Express Platinum Cashback Card. Rather than earning reward points you earn cashback for every £1 spent on the card. You earn 5% cashback in the first three months up to a maximum spend of £2,000. Thereafter, you earn 0.5% on the next £3,500 spent on the card. This rises to 1.0% on spending between £3,500 and £10,000 and 1.5% if you spend more than £10,000.
Health warning: All of these cards are only available to those with a good credit rating however. If you have an impaired credit history, there is no point in applying as your application won't be accepted and it may have a further negative impact on your credit score.
To compare more credit card deals check out our credit card section.
Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.
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