Credit Cards: Best 0% credit cards for balance transfers

Best 0% interest balance transfers

The market for balance transfer cards is very competitive at the moment, with a lot of the major companies sitting around an interest free period of 15 months at 15.9%. The differences to look at would then be the extras and the fees associated with each card.

Currently, the longest interest free period for balance transfers comes with a Virgin credit card which is offering 0% interest for a staggering 15 months with a 2.98% handling fee. The card also offers 0% on purchases for 3 months and you'll also get 50 days interest free on your card purchases, providing you pay your statement balance in full and on time every month.

Both the Barclaycard Platinum Visa and the Barclaycard One Pulse Visa with balance transfer are offering 0% interest on balance transfers for 14 months and purchases for 3 months, but there's a slightly smaller handling fee of 2.5% for any balance transfers with One Pulse and 2.9% with the Platinum. (N.B. you have to watch out with this card that you're not tempted to buy more at 0% and stop yourself paying off the debt). The One Pulse can also make life easier with an inbuilt Oyster card, so you'd never find yourself without tube money to get home.

Egg Visa's latest offer is 0% on balance transfers until 1st April 2010 on balances transfered before the 1st May this year. The APR is 16.9%, the handling fee is 3% and the card also gives you 0% interest on purchases until 1st April 2009.

HSBC are offering 0% on balances transfered within 30 days of opening your account, for 15 months, and 3 months 0% AER on purchases for their HSBC Mastercard. Their typical rate is 16.9% and a 2.9% fee applies.

Also have a look at the Post Office credit card. It is now offering 0% on balance transfers for 12 months - with a 2.98% transfer fee and providing the transfer is made within three months of opening the account.

Unusually, after you’ve had the card for a year you’ll get another 5 months of 0% on balance transfers and the same again for the second year. You’ll also get 3 months of 0% on purchases too which is nice, and you don’t have to pay commission when you use this card abroad. Ideal if you’re always travelling!

0% Charity credit cards

There are a few charity credit cards out there that will offer you some great 0% introductory deals. MBNA offer a number of charity cards, including one's for Breakthrough Breast Cancer and one for WWF, both offering 12 months 0% on purchases (3% balance transfer fee applies and the balance must be transfered within the first 90 days of opening the account).

You'll also get 0% on purchases for the first 3 months. As an added bonus, MBNA will donate £5 the first time you use the Breakthrough Breast Cancer credit card, £2 every year while the account is active and 0.25% of the value of every purchase you make.

What are 0% balance transfer credit cards?

These are cards that will take on the debt you owe on another credit card and they will let you pay it off, without any interest, over a certain number of months. After that 0% period they will start charging you interest so it's a good idea to try to pay the debt off within the 0% period. Also, you will be charged an initial fee for switching the debt over, usually between 2.5-3%.

Who are these cards good for?

If you have an ongoing debt on a credit card that is currently charging you interest then it could be worthwhile switching it to one that doesn't charge any interest for a few months. However, it depends how much debt you have and what the interest is that you're currently paying.

If it's a relatively small amount (say under £1,000) and the interest rate is below average (i.e. below about 17%) then you might be better off simply working to pay that debt off as fast as possible (see this article for tips on doing that). This is because all of the 0% deals charge you a 'handling fee' to switch your balance over and that can wipe out anything you would save with the 0% deal.

Before applying for any credit card, it’s important to do the maths behind it to check you’re applying for the card that’s best for you. If you will use your card for purchases more than transferring balances then go for a card that offers 0% interest on purchases (see this article for the best of those).

Also, depending on your credit rating and the debt you need to move, it could be better in the long-term to move to a card with a low life-time balance.

Should I apply?

If your credit rating is not excellent then it may not be a good idea even to apply for one of these. If you think your credit rating might not be up to scratch then check out your credit rating first before wasting an application.