5 recent changes to credit cards that could benefit you

Keeping up with the credit card market isn’t something we’d expect you to do in your spare time – which is why we’re here to sift out what you need to know.

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These five changes to the market (some surprising) have landed in the past few weeks – and, chances are, at least one of them could benefit your pocket.

1. Nationwide credit card holder? Things have got better

At the start of May, Nationwide surprised us by announcing two separate improvements to its credit cards. Both of them will benefit borrowers over monthly balance-clearers.

Firstly, the provider has scrapped the £12 fee that it used to charge for busting your agreed credit limit. That’s simple enough.

The second change is a little more complicated.

Nationwide said it will no longer charge interest on new purchases made with one of its 0% balance transfer cards (which has debt sitting on it) so long as you pay off the cost of that purchase by the end of the statement month.

Previously, new purchases on BT cards DID incur interest because – even though the debt was sitting on the 0% part of the card – it had never been officially cleared back down to £0.

Take this example:

-You have transferred a debt of £5,000 onto Nationwide’s 26-month 0% balance transfer credit card (which comes with a 2.4% fee)

-You make a new purchase for £100 using that same card (after the initial 3-month 0% offer purchases)

-You pay off that £100 within the statement month (which is more than your minimum monthly payment)

-Previously Nationwide would have charged interest on that £100. Now it won’t.

Nationwide has called for other credit card providers to make the same change but a quick ring-around revealed many – including Virgin, Capital One and Halifax – wouldn’t have charged interest anyway.

2. Got card debt? You’ve now got options

If you have credit card debt which you’ve been meaning to shift onto a 0% balance transfer deal, a new raft of plastic recently launched by Virgin Money could be a welcome trigger. 

Among Virgin’s new deals is a 0% balance transfer card which equals Barclaycard in its 36-month 0% duration and 2.99% fee offering. But Virgin’s card comes with the added bonus of offering interest-free cash in your account (also for 36 months) in the form of a money transfer – though the fee for this is higher at 4%.

If you don’t need three years to pay off your debt, Virgin has some new cards with shorter 0% periods which are market-leading. For example, its 34-month 0% balance transfer card with a 2.79% fee or its 26-month 0% balance transfer card with a 1.25% fee. Again, both cards also come with an equivalent 0% money transfer option for the higher charge of 4%.

3. Booking a holiday? New Tesco card best fee-free card for 0% purchases

Finding an extra grand or two for a family holiday is no easy feat. But if you are left with no choice but to put it on a credit card – STOP – and make sure it’s the right one! Tesco has just launched a brand new deal which offers the first 21 months of purchases interest-free.

It’s not as long as Santander’s 23-month 0% purchase card but that one charges an annual fee of £24 a year, whereas Tesco’s plastic is free.

As soon as you’ve made the booking, set up a monthly direct debit which will clear your balance before the 18.9% APR kicks in by spring 2017.

4. No debt and looking for rewards? You should get moving

Reward credit cards which offer something back for your spend such as airline miles, points or shopping vouchers, or even cash, could soon be a thing of the past.

Last month, Capital One announced it was to scrap these perks on its card range completely following new EU restrictions on the profits it can make (it was able to offer the rewards in the first place through charging the retailer a fee every time a customer used the card).

Now these charges have been squeezed, the 5p back for every £1 Capital One customers spent was no longer tenable.

Some say Capital One will trigger the beginning of the end of cashback and rewards cards, so if you’re someone who clears your balance religiously every month, you may as well get yours now. Compare deals here.

5. Just looking for good value flexibility? New low rate cards make it easier

If you just lean on your credit card from time to time, a fee-free card with a consistent low APR is your best bet. And options here have expanded too.

Halifax has just launched a new Low Rate credit card which offer a single representative APR of 6.45% (variable) on both new purchases and balance transfers.  The card is now joint market-leading with Bank of Scotland and Lloyds Bank.

Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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