First Barclaycard improved its Platinum credit card with Extended Balance Transfer, taking the 0% term from 35 to 36 months – or three years. Virgin Money was quick to follow suit, also offering new card customers three years’ interest-free. You can find out more about the deals here…
What’s the lowdown?
Barclaycard, which has long led the race for the longest 0% balance transfer term, is now offering three years on its flagship card. It charges an initial transfer fee of 3.5%, reduced to 2.99% by way of a refund.
Virgin, which offers the same 36-month 0% term, charges a slightly higher balance transfer fee of 3.49% (or 4% if you want a money transfer whereby cash from your agreed limit is paid straight into your account – more on this later).
You can transfer any number of balances (up to your credit limit) to either of these cards, so long as they are from different providers and the transfer is made within the first 60 days of opening your account. Once three-year interest-free periods are up, both cards charge a representative APR of 18.9% (variable).
In terms of NEW spending, both Virgin and Barclaycard offer 0% interest for the first six months but there may be better alternatives for this, as we’ll explain more about below.
Who are they good for?
If you’ve been trying to pay off expensive credit card debts for a while but not getting very far – perhaps making just the minimum repayments – three years’ interest-free on either of these cards could be what you need to get sorted.
If you divide your debt between 36 (months) and set up a direct debit, you can’t go wrong.
The Virgin card could also be a great option if you need a cash injection into your current account, as there are some situations when you can’t use a credit card. You use cash to pay off a loan or an expensive overdraft for example.
As is standard practice in the 0% balance transfer sector, you won’t be able to transfer debt already sitting on a Barclaycard to the Barclaycard – and the same applies to Virgin. But the fact there’s now TWO providers offering three years at 0% gives anyone with credit card debt more choice.
As with any top-notch credit card deals you’ll need an excellent credit history to be accepted. If you’ve missed any repayments in the past, your application will probably be refused.
Remember that to keep the 0% offer intact, you’ll have to stay within your credit limit and make at least the minimum payment every month. If you don’t then your rate will shoot up to the 18.9% APRs charged by both cards. And as these are representative, it could be even higher.
If you’re planning on using the card for new spending as well as balance transfers, you must make a note of when the six-month 0% period ends and pay off your purchases by then, or you’ll be hit by the same 18.9% interest charge.
In fact, you’re best not to use either of these cards for new purchases at all – even at 0%. If that’s what you are after, check out the deals that specialise in 0% on new spending instead.
What’s the verdict?
It’s great that credit card debtors have more choice when it comes to where to shift their balance. But the 3.49% and 2.99% fees are not cheap – and if you don’t need three years to clear your debts, there are fee-free options.
For example, Santander’s 123 Credit Card offers an introductory rate of 0% on balance transfers for 23 months, with no balance transfer fee at all. This card also allows you to earn cashback on your monthly spending on petrol, spend at department stores and supermarket and some travel costs.
It comes with a 24 annual fee, although this refunded for the first year if you’re a 123 Santander current account customer.
Failing this, try the Santander Credit Card which offers 15 months’ 0% on balance transfers and purchases for NO fee at all!
The 0% balance transfer credit card market has exploded over the past year or so, with a whole range of 0% terms and fees – some deals don’t charge fees at all if you don’t need the maximum term to clear your debt.
To make life easier, check out MoneySuperMarket’s balance transfer calculator. Simply put in your credit card balance and how much you can afford to pay each month, and it will return a list of the cheapest cards for you.
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.