Is your 0% credit card deal about to end?

It’s always great to take advantage of a 0% interest period on a new credit card but it can be painful when it ends. Are you one of the thousands about to be hit by rate shock?

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Every January, a rush of people sort out their finances by consolidating debt to one of the credit cards that offer an interest-free period on debt.

Back in 2009, the average 0% balance transfer period was just over 14 and a half months, meaning thousands of cardholders have now come to the end of their offers.

Many more will have interest-free periods ending in the coming months and it won’t just be those who took advantage of a 0% balance transfer card. Interest-free cards are also hugely popular with those looking to spread the cost of purchases.

Ideally of course, you’ll clear your balance during the interest-free period, but in practice many people don’t manage to do this. If you are one of these and your 0% offer has ended, you’re probably now paying an annual rate of interest of more than 16%.

That can equate to thousands more pounds over the lifetime of the debt if you make just minimum payments.

So, if you want to avoid rocketing rates and really get to grip with your credit card debt, what are your options?

I want another balance transfer deal

Granted, it’s not as easy as it was to flit from one 0% card to another, but if your credit rating is good or excellent, you should be able to move your outstanding credit card debt onto a new card.

The best balance transfer deal at the moment is a brand new offering from Yorkshire Bank and Clydesdale Bank – the Gold Mastercard. This offers a market-leading 16 months 0% interest on balance transfers for a 3.00% fee.

You’ll pay 16.9% annual percentage rate (APR) after that. Purchases are free for the first three months, after which you'll pay the standard rate.

Another option is the HSBC Credit Card, which lets you transfer a balance to a 15 month 0% deal for a 2.9% fee. After that period ends, it’s 16.9% APR.

If you want a lower APR, the Santander Credit Card charges 15.9% APR and gives you 15 months 0% interest for a 3% fee.

There’s also Barclaycard Platinum, which gives cardholders 0% on balance transfers until July 2011 and charges a 2.90% fee for the privilege. The typical APR is 15.9% and, again, you get three months 0% interest on purchases.

I want a low-rate credit card

Maybe you don’t think you’ll manage to repay your debt within another 0% period. In that case, picking a low standard rate credit card might be best in the long term.

The market-leading low rate card is the MBNA 6.7% Low Rate credit card. Its typical APR is 6.7% and there is no balance transfer fee, meaning you could simply instantly cut the interest you pay on your existing balance permanently.

Of course, there are some catches – you can’t transfer a balance from an existing MBNA card and you have to be over 23 with an income of more than £20,000.

Alternatively, the Halifax Easy Rate charges just 6.9% APR and also has no balance transfer fee.

If you want a low rate and the chance to earn rewards, the Barclaycard Platinum Simplicity has a low rate of 7.8%, no balance transfer fee and gives you access to the Barclaycard Freedom reward scheme, which gives you up to 1% cashback for shopping at certain retailers (such as Shell and Pizza Express).

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I want a balance transfer deal that lets me spend

Maybe you want to transfer a balance onto a new credit card but you also want to use that card to spend with.

With many cards, that’s a big mistake because your repayments are set against the cheapest debt first, namely the transferred balance you’re paying 0% for. That means you’d have to clear the entire transferred balance before you could pay off any new spending and all the while you’d be paying interest on it.

But there are some cards designed for both, offering lengthy 0% introductory periods on new spending as well as transferred balances, meaning you can use them for both.

There are two market-leading cards. The Virgin 12/12 Credit Card gives you 12 months 0% interest on both balance transfers and purchases, after which you pay a typical APR of 18.9%. There’s a 2.98% fee for balance transfers.

You also get discounts on Virgin products, including 10% off Virgin Holidays and Virgin Wine.

The other leading option is the Sainsbury’s Credit Card, which also gives you a full year interest-free on both purchases and balance transfers, this time with a 3% fee on any transfers.

After that, the typical APR is 15.9%. Only Nectar cardholders can apply for the Sainsbury’s Credit Card but you can pick one up for free from shops including Sainsbury’s, BP, Homebase or Gala Bingo.

Credit crunching

Of course, the credit crunch and recession has had an impact on the kinds of deals credit card companies are offering.

Kevin Mountford, head of banking at moneysupermarket.com, said: “Across the board, lenders have been reducing the length of their zero per cent balance transfer deals, meaning savvy borrowers will have to keep an eye on their statements and ensure they either pay off their debt in full, or move their debt more often in order to remain on an interest-free deal.

“However, with credit being difficult to obtain, there is no guarantee you will be able to transfer your debts in the future."

Give yourself the best chance possible of qualifying for a balance transfer by checking your credit file for errors and keeping it squeaky clean. You can use our credit checking channel to monitor your score.

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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