Credit card companies are caught in a head-to-head battle to try to bring out the longest 0% balance transfer period.
Halifax today extended its 0% balance transfer period from 20 months – which for a short time was the longest period on offer on the market – to 22 months on its Balance Transfer credit card, narrowly beating the 21-month offer Barclaycard brought out last Friday.
However, Barclaycard has now matched Halifax and extended this to 22 months with its Barclaycard Platinum card.
As an extra sweetener, if you apply directly through the Barclaycard site you will get a £20 refund.
Although both cards offer the same time frame for the 0% balance transfer, the deal from Halifax comes with a hefty fee of 3.5%, while Barclaycard has managed to keep fees at 2.9%.
Meanwhile, Barclaycard has withdrawn its 24-month 0% balance transfer period card, which saw 30,000 applications since launch, the equivalent of one every minute – and replaced it with the shorter deal.
Just behind Barclaycard and Halifax is Virgin, with its 19-month 0% balance transfer period and 2.49% fee.
The length of time 0% balance transfer periods last has doubled in the past five years, according to Defaqto, but these deals are usually restricted to new customers.
David Black, spokesperson for Defaqto, says: "The credit card market abounds with some very attractive offers but it remains the case that the best deals are aimed at new customers. Therefore, those with good credit ratings have a real incentive to change their credit card on a regular basis and should ensure that they choose a card that matches their likely usage."
How to do a 0% balance transfer
Q: What is a balance transfer?
A: A balance transfer means you effectively switch the debt from a card with a high interest rate to a card with a 0% balance transfer and while the balance transfer period exists you won’t be paying any interest on the debt.
Q: How do I qualify for one?
A: The best deals are for new customers and especially those with a good credit rating. Many card providers will automatically reject you if you already have one of its products, or if you have done in the past 12 to 18 months.
Q: What are the costs involved?
A: You will have to pay a fee of around 3% and some providers have a minimum amount you must transfer. When choosing a card, first work out if the balance transfer fee is worth paying in relation to the amount of debt you have.
Q: What should I watch out for?
A: When the introductory period ends you may be hit with higher than average interest rates. At this point, it may be worth moving the debt over to another card with a balance transfer period (if you are eligible) or if you’ve cleared the debt changing to another card altogether with a lower interest rate.