Lloyds joins Halifax and Tesco in waiving balance transfer fees
Lloyds Bank's new 13/13 credit card charges no interest on balance transfers and purchases for 13 months and there's no fee for transfers made in the first 90 days.
It's Lloyds' longest-ever fee-free balance transfer card and based on a typical balance of £2,000, switching to the card could save consumers more than £359 over the 13-month period.
The card will revert to a representative rate of 18.9% APR after the 0% period is over, while customers who don't qualify for the best deal will receive 0% for nine months with an APR of 21.95%.
The move comes after Halifax, owned by Lloyds Banking Group, launched its own best fee-free credit card earlier this month. However, the Halifax card waives the transfer fee for all 16 months it offers 0% on balance transfers. The card is also interest-free for purchases for six months.
Just behind Halifax's deal is the Tesco Bank's Clubcard Credit Card with No Fee, which offers 14 months of 0% on purchases and balance transfers (no transfer fee - as the name suggests), as well as the chance to earn Clubcard points as you spend.
If you need longer to pay off your debt – and are willing to pay a fee - then Barclaycard's Platinum Balance Transfer Card comes with a hefty 0% period of 36 months. It comes with a fee of 2.99%, so based on a balance of £2,000 you will pay another £60 to transfer.
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%.