Is your 0% credit card offer about to end?

Credit cards which charge 0% on balance transfers for the first few months are a great way to avoid paying interest on your debts – but remember to keep a note of when the 0% period ends.

All good things come to an end, and failing to switch any debts you haven’t cleared to a new deal could cost you dear as the interest rates that kick in once the introductory periods finish are often high.

Tim Moss, head of loans and debt at MoneySupermarket, said: “With standard representative annual percentage rates (APRs) of around 16% to 19%, you could end up with huge interest charges on your debts if you fail to switch to a new 0% deal before your current one comes to an end.”

What are the best balance transfer cards on the market?

The best balance transfer deal on the market at the moment is from Barclaycard. Its Platinum Credit Card with Extended Balance Transfer offers an incredible 22 months at 0%.

The offer is subject to a one-off fee of 2.9% of the amount to be transferred – as long as you switch your debts within the first 60 days. Fail to do so and you will pay a higher fee of 3.2%.

If you have large debts to transfer, and are confident of your ability to clear them within 20 months, the Barclaycard Platinum Credit card with Balance Transfer may prove a better option due to its lower fee.

It charges 2.6%, or 3% if you fail to switch your debts within 60 days, but offers two months less at 0%.

Advantages of the two cards include three months at 0% on purchases and a rewards scheme.

However, if you are planning to use the cards as a way of avoiding interest on existing debts, it is a good idea not to spend more on it. The purchases offers and rewards schemes are therefore of little use.

It is also worth noting that the representative APR on both cards is 17.5% (variable). You will therefore need to switch again if you still have debts once the 22 or 20-month introductory offers come to an end.



Other alternatives

The Halifax Balance Transfer Credit card is also offering 22 months at 0%. However, its offer is only open to those with up to £3,000 to switch.

The deal also comes with a higher handling charge of 3.5%, while the representative APR that kicks in after 22 months is slightly higher at 17.9% and no transfers can be made from other HBOS cards.

It is, however, a great option for any existing Barclaycard customers as they cannot take advantage of either of the cards described above.

Other options include the Virgin Credit Card, which offers 20 months at 0% on balance transfers, subject to a fee of 2.99%, and has a representative APR of 16.8% (variable).

The representative APR you pay on any lingering balance transfer debts after the 20 months is a massive 18.9% (variable), though, making it even more crucial to switch again should you find yourself in this position.

MBNA cardholders are also barred from transferring their balances on to this card, although it could be a good choice for anyone locked out of the Barclaycard and Halifax deals mentioned above due to the cards they hold already.

Remember though that even if you do not hold a Barclaycard, HBOS or MBNA card, these deals are still reserved for borrowers with excellent credit scores.

If you have doubts about whether or not you will qualify, it is therefore a good idea to use the MoneySupermarket Eligibility Checker tool to find out before further damaging your credit file with rejected applications.

What about taking out a loan instead?

While 0% credit cards are the best option for those keen to completely avoid paying interest on their debts, they can lead less disciplined borrowers into trouble.

The fact that you can continue to spend on a credit card, and that your monthly payments are not fixed, can keep you trapped in the debt cycle.

And that is usually best avoided even if you are paying 0% on your debts. A low-rate loan – with a fixed payment structure and term – can therefore be a better idea for anyone finding it hard to pay off their credit card debts.

This is particularly true for those owing more than £7,500, for example, as loan rates on this level of borrowing are currently particularly competitive.

Moss said: “If your debts have been following you around for a while, and are getting larger rather than smaller, a personal loan can be the best way to regain control of the situation and enjoy debt freedom.”

If a loan sounds of interest, Alliance & Leicester is currently offering a representative APR of 6.3% on loans of between £7,500 and £14,950.

Meanwhile, NationwideTesco Bank and M&S are marketing deals with representative APRs of 6.4% on amounts of between £7,500 and £14,999 (or £7,500 and £15,000 with M&S to be exact).

You will once again need a good credit score to qualify for these deals, though. Otherwise, the interest rates charged will jump considerably.

The best non-homeowner personal loan for those with fair credit scores, for example, is from Aspire Money at a representative APR of 62.1%.

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 loans and 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 2011.

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