Sainsbury's launches lowest balance transfer fee
The Sainsbury's Nectar Low BT Fee Credit Card charges a transfer fee of just 0.5%. That compares to a hefty 3.3% for the HSBC Credit Card, which is one of the biggest transfer fees in the market.
The supermarket's card is also interest free on balance transfers and purchases for 12 months.
After the interest-free period on the supermarket bank's new card is up, a representative APR of 18.9% applies.
Customers using their card in-store or online at Sainsbury's earn four Nectar points per £1 spent, which the supermarket said is the equivalent to 2% back on Sainsbury's shopping.
They'll also earn one point for every £5 spent elsewhere - including while abroad.
Cardholders will also get an additional three points per £1 spent on fuel at Sainsbury's forecourts, compared to the one point per litre all Nectar cardholders normally receive.
Meanwhile, the supermarket already has the cheapest low-rate credit card on the market. The Sainsbury's Nectar Low Rate Credit Card has an APR of just 6.9% and no balance transfer fee.
Nationwide's Select Credit card, which has a transfer fee of 2.4%, is one of the few balance transfer cards to have a longer 0% period on purchases, at 15 months.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
Moving money from one account to another, whether switching bank accounts or more likely transferring the outstanding balance on your credit card to another card that charges a lower – or 0% – rate of interest. Some card providers may charge a transfer fee that can be a percentage of the balance transferred.
This is used to compare interest rates for borrowing. It is the total (or “gross”) interest you’ll pay over the life of a loan, including charges and fees. For credit cards where interest is charged at more frequent intervals, the APR includes a “compounding” effect (paying interest on interest). So for a credit card charging 2% interest a month (equating to 24% a year), the APR would actually be 26.82%.