The cost of living crisis means we all need to get our finances in order – so we took a look at which credit cards could best help you with credit card debt
Funds transfer credit cards can help you manage your credit card debt (Image: Adobe)
The cost-of-living crisis means we all need to look at our finances more than ever.
Although they should always be used with extreme caution, credit cards can help structure your finances and build your credit score.
But what are balance transfers – and which 0% balance transfer cards offer the best value for money?
Here’s what you need to know.
What is a balance transfer?
A balance transfer is one way to manage credit card debt.
Essentially, it involves cashing out one credit card with another.
This is usually only a good idea if you’re paying expensive interest on the original card to pay off debt and the new card offers you a cheaper interest rate or no interest at all.
If this is the case, you will ultimately save money on debt payments and be able to pay off your debt faster.
But if you have a large debt to pay off, 0% balance transfer cards offer the best deal and could save you hundreds of pounds.
Most major banks allow you to transfer funds from one card to another for a one-time fee – although you can’t do this with a card from your existing bank or larger group (in most cases).
For example, if you have a Natwest credit card that you want to cash out, you cannot go to the Royal Bank of Scotland to get a balance transfer card.
How do 0% balance transfer credit cards work?
0% balance transfer cards typically offer 0% interest rates for a period of time – but most will charge you a small fee for any balance transfers you make.
As a rule of thumb, the longer the 0% rate is locked, the higher the fee for transferring the balance.
To help you decide which credit card is right for you, consumer group Which? recommends dividing the amount you owe by the amount you can repay each month.
This calculation gives you the number of months it will take you to pay off your debt.
It is worth noting that it is important that you pay the minimum repayment amount required by the card each month.
If it takes longer than 34 months to pay off the debt – the maximum period currently offered to maintain a 0% interest rate – you may need to make another balance transfer at the end of your 0% interest rate.
What are the best 0% balance transfer cards?
Mazic News looked at leading consumer websites to find out which 0% transfer cards currently offer the best value.
Your personal circumstances (such as your credit score) affect which cards you can get, so it’s worth checking your eligibility with the bank or lender.
You should also check credit card terms and conditions before signing up for them.
Longest 0% interest
- Virgin Money Balance Transfer Credit Card – 0% for 34 months (2.7% fee on balance transfers), 21.9% APR
- Tesco Bank Balance Transfer Credit Card – 0% for 33 months (2.59% fee on balance transfers), 21.9% APR
- Santander Everyday Long Term Balance Transfer Credit Card – 0% for 33 months (2.65% fee on balance transfers), 21.9% APR
- HSBC Visa Credit Card Balance Transfer – 0% for 33 months (2.7% fee on balance transfers), 21.9% APR
- Sainsbury’s Bank 33 Month Balance Transfer Credit Card – 0% for 33 months (2.89% fee on balance transfers), 21.9% APR
- M&S Bank Transfer Plus Credit Card – 0% for 32 months (1.99% fee on balance transfers), 21.9% APR
Cheapest toll-free prepaid transfer cards
- Santander All-in-One Credit Card – 0% for 26 months (no transfer fee), 23.7% APR
- Sainsbury’s Bank credit card for 21 month no fee balance transfer – 0% for 21 months (no balance transfer fee), 20.9% APR
- Santander Everyday Credit Card with no balance transfer fee – 0% for 18 months (no balance transfer fee), 20.9% APR
- Barclaycard Platinum Balance Transfer – 0% for 15 months (no balance transfer fee), 21.9% APR
- Virgin Money Balance Transfer Credit Card – 0% for 15 months (no balance transfer fee), 23.9% APR