Tesco Bank has launched a new 24-month fee-free 0% balance transfer card, matching the market-leading deal launched by Halifax earlier this week.
As with the Halifax deal, the new Tesco ‘No Balance Transfer Card’ charges no interest on debts transferred from other cards for up to two years, and there’s no balance transfer fee either.
However, people looking to shift a credit card debt might find the Tesco Bank deal the more attractive of the two, as all successful applicants will receive the full two-year interest free period.
Halifax will only offer the full 24-month 0% period to 51% of people who qualify for the card. Other successful applicants will only get a 13-month interest-free period.
Alastair Douglas, chief executive of TotallyMoney.com says:“Tesco shoppers carrying a balance on their current credit cards will benefit the most from this card. The no fee balance transfer offer will let them transfer their current balance for no cost and they won’t have to pay interest for 24 months. They’ll also have the added bonus of earning Clubcard points whenever they spend.”
He adds that he doesn't expect a big shift in the market following the new Tesco and Halifax deals, though the growing competition will benefit consumers.
The Tesco No Balance Transfer Card charges 18.9% APR once the 0% period is up, but while “most” successful applicants will receive this rate, some borrowers will be charged 20.9% APR or 23.9% APR, subject to their credit history.
Halifax’s two-year fee-free balance transfer card also charges 18.9% representative APR, though borrowers that don’t qualify for the advertised rate will also be charged higher interest rates, at 21.9% or 25.9% APR.
While this is the strongest deal, if you can repay your card debt over two years, anyone looking to pay down a larger credit card debt might want to consider a longer interest-free period. Several lenders offer interest-free balance transfers for up to 40 months.
Cheap credit card and mortgage deals fly onto the market
A spate of cheaper credit card and mortgage deals have arrived on the market this week, following measures announced by the Bank of England on Monday that will make it easier for banks to lend another £150 billion to consumers and small businesses.
For example, as well as the two new balance transfer cards above, HSBC today announced a record-low 10-year fixed rate mortgage deal at 2.79%, while Coventry Building Society plans to launch an even cheaper 10-year fix tomorrow.