What's the deal?
Lloyds TSB, Halifax and Bank of Scotland, all part of the Lloyds Banking Group, have improved their balance transfer deals as follows:
- Halifax has increased the 0% interest shelter on its balance transfer credit card to 27 months, up from 25 months. It has a 3% fee and a representative annual percentage rate (APR) of 18.9% (variable).
- Bank of Scotland has upped the 0% window on its Platinum balance transfer credit card to 25 months from 18 months. It has a 1.5% fee and a representative APR of 17.9% (variable).
- Lloyds TSB has also increased the 0% offer on its balance transfer card to 24 months, up from 21 months. It has a 1.5% fee and a representative APR of 17.9% (variable).
All three of these cards also offer 0% on purchases for three months.
However, while these cards are competitive, they still don't beat the market leading Barclaycard Platinum Credit Card with Extended Balance Transfer, which offers 28 months interest-free on balance transfers and comes with a fee of 3.5% on the amount you transfer.
Who are the deals good for?
All the above credit cards are great options for those who have expensive card debt to pay off, providing it's not already sitting on a credit card from Halifax, Lloyds TSB or Bank of Scotland. This is because you can't transfer credit card debt between plastic from the same provider or group of providers.
However, this also means these cards are good choices for those who have debt on a Barclaycard and therefore can't shift it to the market leading deal.
In addition, the Lloyds TSB and Bank of Scotland credit cards are ideal for those who would prefer to pay a lower transfer fee – providing they are confident they can clear their debt within 24 months.
The main catch with the cards from Lloyds Banking Group is that none is market leading and all three can be beaten by the 28 months 0% shelter Barclaycard offers. But the Lloyds cards win out with their lower transfer fees. On a debt of £5,000, you'd pay just £75 (1.5%) with the Lloyds TSB or Bank of Scotland cards, but £175 (3.5%) with Barclaycard.
As is typical of this type of credit card, once the 0% window ends on each of these cards, you'll start paying interest, so it's important to clear your balance before this happens.
What's the verdict?
The improved credit cards from Lloyds Banking Group are attractive options for those looking to shelter their existing card debt from interest for two years or more.
Which card you decide to go for will depend on whether you can afford to clear your debt within the shorter timeframe of 24 months, allowing you to take advantage of a lower transfer fee (Lloyds TSB and Bank of Scotland), or whether you need an additional three months at 0% in which to pay off your debt (Halifax).
It's worth doing some calculations to see which option is best for you. For example, if you had a debt of £5,000:
- With the Halifax credit card, taking the £150 fee into account, you'd have to pay off £191 a month to clear it before the 27 months were up.
- But with the Bank of Scotland and Lloyds TSB cards, taking the £75 fee into account, you'd have to pay off £211 a month to clear it before the 24 months were up. But by doing so, you'd save yourself £75 in fees.
Although 0% deals are getting lengthier, if you think you might struggle to clear your debt before the interest-free window ends, you could consider opting for a low APR credit card instead.
Although these credit cards charge interest, the APR is far lower than the average of 17.31%, and it's charged for the life of the debt, so there's no deadline by which you need to have paid off your credit card debt in full. In addition, many of these cards have no transfer fees.
For example, the Sainsbury's Nectar Low Rate Credit Card and Sainsbury's Cashback Low Rate Credit Card both charge a representative APR of 7.8% (variable) for the life of the debt. And there's no transfer fee.
Alternatively, the Barclaycard Simplicity credit card has a representative APR of 7.9% (variable) and again it has no transfer fee.
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.