Tesco Bank launches 19-month purchase credit card
Tesco Bank has introduced the longest 0% interest credit card currently available.
It is offering 0% interest on new purchases for 19 months, so customers will pay no interest on their purchases until 2016. The card offers 0% on balance transfers for three months, with a balance transfer fee of 2.9%.
Tesco Bank Clubcard credit card customers are also rewarded with Clubcard points when they shop, receiving one point for every £4 spent on the card.
While other credit cards offer good deals for balance transfers, they lag behind on new purchases - though some do offer six-month deals at 0% interest.
According to Moneywise.co.uk/compare, the market-leading card for balance transfers is Barclaycard Platinum With Balance Transfer, which offers 0% on balance transfers for 33 months, with a 2.99% fee and 0% on new purchases for six months.
Next is Halifax Balance Transfer Credit Card - with 0% interest for 32 months, a 3% fee, and 0% on new purchases for six months – and Sainsbury's Bank, which is offering 31 months for balance transfers, a 2.89% fee, and 0% interest on purchases for six months on its Nectar Balance Transfer Credit Card.
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.