Focus on: Pay just 6.9% on your credit card debt

AA Financial Services’ new credit card, Transfer Plus, charges interest at a flat rate of 6.9% for as long as it takes you to clear a balance transfer or money transfer made now.


This puts it top of the tables for low-rate cards, alongside the Sainsbury’s so-named Low Rate Credit Card, also charging 6.9%.

Unlike the Sainsbury’s card, however, which also charges 6.9% (variable) on purchases, the representative APR payable on purchases with the AA is considerably higher at 16.9% (variable).

Here, we take a closer look at the new card and ask whether it is the right choice for you.

What’s the deal?

The new AA Transfer Plus Credit Card offers a promotional rate of 6.9% on balance and money transfers, which involve money being paid into your current account from the card.

The money transferred can therefore be used for any purpose – such as to contribute to the cost of a car or a wedding, or to consolidate a range of debts on accounts charging higher interest rates.

Mark Huggins, director of AA Financial Services, said: “We believe this new AA Transfer Plus card, which offers a competitive, low rate for the life of the balance, is one of the most suitable on the UK market for helping consumers pay for significant purchases or consolidate debts.”

All transactions of this kind – including balance transfers from other cards – are however subject to a one-off fee of 2% of the sum being transferred.

They must also be made within the first 60 days of opening an account.

Any catches?

The two main downsides of this card, in comparison with the Sainsbury’s Low Rate card, are the 2% balance transfer fee and the fact that the 6.9% rate only applies to balance and money transfers.

The 2% charge would add £30 to a balance of £1,500 for example.

And at 16.9% (variable), the representative APR on purchases is much less attractive.

If you owe money on an MBNA card, you will be unable to transfer it to the new AA card.

Anyone who misses a payment or exceeds their credit limit also runs the risk of the promotional rate being withdrawn and having to pay 16.9% (variable) on their debts.

Those with low credit scores may also be disappointed as your credit limit depends on your individual circumstances.

The fact that you can only make transfers within the first 60 days that you have the card may also catch some people out. 

What’s the verdict?

The new AA Transfer Plus Credit Card does offer a cheap and flexible way to borrow money – but especially to consolidate your debts.

As the promotional balance transfer rate of 6.9% is guaranteed to last for the life of the balance (and is available to all successful applicants) you do not need to worry about moving your money again due to the standard representative APR kicking in.

However, while it is cheaper than taking out a personal loan of £3,000 (charged at 14.9% APR or more) loans of between £7,500 and £15,000 are currently available for as little as 5.6%. Check out our loans channel here.

If you are only planning to transfer a credit card balance (and not make a money transfer), the Sainsbury’s card will be a better options as it has no balance transfer fee, whereas the AA card charges 2%.

And if you are planning to make new purchases on your card, the standard representative APR with Sainsbury’s is also 10% lower than the AA at 6.9%.

However, when it comes to money transfers – which most credit cards don’t offer at all – the AA’s rate of 6.9% is certainly worth a look.

Top tip

Remember however, that you can avoid paying interest on your debt altogether by opting for a credit card that offers 0% on balance transfers.

However, all cards of this kind charge a balance transfer fee – usually around 3% – as well as a limit the time the 0% offer applies for.

Options include the Barclaycard Platinum Credit Card with Extended Balance Transfer, which offers an incredible 23 months at 0% (subject to a one-off fee of 2.8%).

The NatWest Platinum Low Balance Transfer Fee Credit card is another alternative, charging 0% for 13 months on balance transfers for an upfront fee of just 1%.

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. We’re free, independent and compare all UK credit cards, as well as offering exclusive deals you can’t get anywhere else. Contact at Moneysupermarket House, St David’s Park, Ewloe, Flintshire, CH5 3UZ. © Ltd 2012.

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