Lloyds joins Halifax and Tesco in waiving balance transfer fees

Credit cards

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.

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Other deals

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.

Personal finance expert Andrew Hagger, of Moneycomms.co.uk, told Moneywise: "The balance transfer market has developed into two distinct areas - ultra long-term deals with higher transfer fees and mid-range interest-free periods without the need to pay a fee.
"When considering which may suit you best, work out how much you can afford each month and how long it will take you to clear your balance at with that monthly reduction - don't opt for longer than you'll need as you'll pay over the odds with the transfer fee."
As an example, he points out that the longest balance transfer deal in the market from Virgin Money at 36 months comes with a 3.49% fee. On a £6,000 transfer it will cost you £209.40. "But opt for just four months shorter at 32 months with MBNA and the fee is just 1.94% so your £6,000 transfer will cost £116.40 (a saving of £93)," he said.
"Alternatively, 23 months 0% on balance transfers with the Santander 123 card won't incur a transfer fee and even if you factor in the £2 monthly fee it comes to £46 (£163.40 cheaper than Virgin 36 month deal)."
He warns those shopping around for a new credit card not to be blinkered by the longest 0% periods available as those cards usually work out most expensive with regards balance transfer fees. "A shorter deal will prove more cost effective if you're comfortable you can clear your debt within a reduced timescale," he said.