Top credit cards to pay off debt

Balance transfer credit cards can be handy tools for helping you to clear existing card debt. And if you do have debt to clear, now is the perfect time to do so. Credit card providers are continuing to battle it out in an attempt to win your custom and borrowers have never been so spoilt for choice.

Here, we take a look at the best credit cards for paying off your debt, depending on your circumstances.

1. “I want the longest ever interest-free deal”

If you’re simply after the longest possible interest-free deal, the Barclaycard Platinum credit card with Extended Balance Transfer could be the plastic for you. Offering a market leading 31 months at 0%, this is the longest ever interest-free deal on record, giving you more than two and a half years to clear your debt without worrying about the interest stacking up.

Be aware the card comes with a 2.99% fee and, after the 0% shelter ends, the card has a representative annual percentage rate (APR) of 18.9% (variable).

But while this card may offer the longest 0% deal on the market, it won’t be the best option for everyone.  In fact…

  •  …if your existing debt is on a Barclaycard, head to point 2.
  • …if you’re looking to transfer £3,000 or less, head to point 3.
  • …if you have other debts to clear, head to point 4. 
  • …if your credit rating isn’t up to scratch, head to point 6.

2. “My debt is already held on a Barclaycard”

You can only transfer your existing debt to the Barclaycard Platinum credit card with Extended Balance Transfer if it is not already on a Barclaycard. If it is, you’ll need to look at an alternative option.

The second longest 0% deal comes from the Halifax Balance Transfer credit card which offers 30 months interest-free for a 3% fee.

Alternatively, there’s a cluster of credit cards that all offer 29 months interest-free, including those from MBNA, Virgin Money, Tesco Bank and Santander. All of these cards have fees around the 3% mark.

  • Want to know more about the MBNA and Virgin cards? Head to point 4.

3. “I have a card debt of £3,000 or less”

If you’re transferring a debt of £3,000 or less, it will actually work out cheaper overall to opt for a credit card with shorter 0% shelter but a lower transfer fee. While the Barclaycard Platinum credit card with Extended Balance Transfer comes with a fee of 2.99%, the Nationwide Select credit card has a much lower fee of 0.75%. And although it offers a shorter 0% shelter of 26 months, it’s still the cheaper option for those with debt of £3,000 or less. This is how:

  • Transferring £3,000 to the Barclaycard and paying £100 a month over the 31-month 0% period would see you clear your debt within that time and pay a total of £89.70.
  • But transferring the same amount to the Nationwide card, offering 26 months at 0%, and again paying off £100 a month over 31 months, would see you pay out just £36.88 in interest and fees. And you’d still clear your debt within 31 months.

For more about the Nationwide card, read Melanie Wright’s article.

  • Know it will take you far longer than 31 months to clear your debt? Head to point 5.

4. “I have other debts to clear too”

Credit cards don’t solely have to help you clear your credit card debts. They can also be used to pay off an overdraft or loan, for example. This is because a handful of cards allow you to carry out a money transfer through which you can move available credit from your credit card straight into your current account. These funds can then be used to pay off other debts. 

If this is something that interests you, take a look at the Virgin Money credit card. Issued by MBNA, this card now offers 29 months at 0% on both balance transfers and money transfers, up from the previous 26 months. Be aware, however, that while the balance transfer fee is 2.99%, the money transfer fee is higher at 4%.

Virgin has always proved a popular brand and, a few years back, sat at the top of the best-buy balance transfer tables for many months – until Barclaycard knocked it down a peg or two in 2010. Applying for the Virgin card will also give you access to exclusive discounts such as up to 5% off Virgin holidays, 10% off Virgin Trains, and £50 off your first Virgin Media bill.

You can read about the Virgin Money card in more detail in Jessica Bown’s article.

Alternatively, the MBNA Platinum credit card also offers 29 months on balance transfers and money transfers. Again, the money transfer fee is 4%.

5. “I need longer to pay off my debt”

If you know it’s going to take you a long time to pay off your debt, it’s worth opting for a credit card that offers a low APR for the life of the debt. This will give you plenty of breathing space to start paying down your debt and there’s no deadline by which you need to have cleared it.

The Sainsbury’s Nectar Low Rate credit card, for example, has a representative APR of 7.8% (variable) and there’s no balance transfer fee. Or the Tesco Bank Clubcard credit card with a Low APR has an APR of 7.8% but also offers 0% on balance transfers for three months. Again, there is no balance transfer fee.

6. “I need to improve my credit rating”

If your credit score is below par, you won’t qualify for the very best credit card deals. However, the good news is, some credit cards are designed to help you rebuild your credit rating – and what’s more, you don’t have to miss out on interest-free balance transfers.

In fact, the Capital One Balance Card offers 0% interest on balance transfers until October 2014, for a 3% fee. You’ll be able to apply for this card even if you have had County Court Judgments (CCJs) or have defaulted on payments in the past, but be aware you are unlikely to be accepted if you have been declared bankrupt in the past 12 months. Ensure you clear your balance before the 0% deal ends, as the representative APR is a hefty 34.9% (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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