Now it’s cheaper than EVER to clear big credit card debt

More jostling at the top of the 0% balance transfer credit card tables has resulted in good news for anyone who has a large chunk of debt on plastic to clear.

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Virgin Money, Bank of Scotland, Halifax and Barclaycard all now offer 36 months interest-free on debt transferred to their cards from a different provider. (Note: You can switch debt between Halifax and Bank of Scotland and vice-versa even though they are both part of the same banking group).

Now having hit that all-important three year mark, the latest tactic is to charge less for fees to transfer your balance – and Barclaycard is, once again, leading the charge on the cheapest all-round deal.

What’s the deal?

Barclaycard has edged ahead of the pack by dropping the fee on its Platinum Credit Card with Extended Balance Transfer* from 2.99% to a market-leading 2.49%.

So, transferring a debt of £3,200 (a typical transfer amount we see at MoneySuperMarket) will now cost you £79.68, compared to the previous £95.68. 

The same debt transfer would cost £96 at Bank of Scotland*, £92.80 at Halifax* and £80 at Virgin Moneywhich also has a cracking fee of 2.5%.

Who’s it good for?

Barclaycard’s three-year card deal with a low fee is great if you’ve been struggling to pay off expensive credit card debt but keep getting bogged down with interest payments.

And if your balance is already on a Barclaycard, meaning you won’t be able to take advantage of this offer, you can always opt for one of the other 36-month balance transfer cards on offer.

Any catches?

Barclaycard has only committed to the lower 2.49% fee on applications received up until June 1 which gives you around a week to act. If you don’t make it though, there’s no promotional period on Virgin Money’s 2.5% fee which is only a whisker higher than Barclaycard’s. 

Barclaycard will also charge an initial fee of 3.5% which will be reduced by way of a refund to the quoted 2.49%.

In order to be accepted by Barclaycard – or indeed any other of these cracking 0% balance transfer offers – you’ll have to have a squeaky-clean credit score. If you’re not confident of yours, click on the ‘Will I get this card?’ button first. This is our Smart Search tool and will show you whether you’d be likely to be accepted without leaving a footprint on your credit file.

If you are shown the green light, you’ll need to make sure you keep on top of repayments to retain the interest-free perk. If you miss a payment you’ll most likely be bumped up to Barclaycard’s representative APR of 18.9% (variable) and this will also put a dent in your credit file.

Finally, while the Barclaycard 36-month deal also offers six months at 0% on purchases, it’s best to avoid using these cards for spending at all.

If you don’t know the shape your credit score is in and your application is rejected, you can damage it even further

What’s the verdict?

With a lower balance transfer rate than any comparable card, the Barclaycard is great if you’ve a sizeable balance you’re looking to pay down.

If you don’t think you’ll need the full three years to pay off the debt however, there could be better options out there that could see you duck out of paying the transfer fee altogether.

Santander’s 123 Credit Card** offers 23 months at 0% on balance transfers and has no transfer fee at all. On the downside it does come with an annual fee of £24 (and representative APR of 16.5% variable) but if you’re looking to shift that £3,200 this would still save you more than £55.

Providers that don’t charge either a balance transfer fee OR annual fee include Tesco Bank* (which offers 18 months 0% on balance transfers), the Post Office* and Halifax*(which both offer 16 months at 0% on balance transfers). All of these cards then jump to representative APRs of 18.9% (variable).

Top Tip!

With an ever-growing range of fees and 0% durations on offer, our clever slider tool is a quick way of finding the best deal for you. Place the first slider to the amount of debt you have and the second to the maximum you can afford to repay each month and it will list your best options.

The tool's default setting is a £3,200 debt and £100 monthly repayment. If you want to see the 36-month range of options we've talked about in this article, you'll need to adjust the debt amount upwards.

To make sure you get your debt paid off in the allotted time, divide the balance you're transferring, plus any fees, by the number of interest-free months. Then set up a direct debit from your bank for that amount. This also means you won't miss a payment and so won't get penalised.

* Representative Example: If you spend £1,200 at a purchase interest rate of 18.9% p.a. (variable) your representative rate will be 18.9% APR (variable)

** Representative Example: If you spend £1,200 at a purchase interest rate of 12.7% p.a. (variable) with a £24 annual Fee your representative rate will be 16.5% APR (variable).

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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