Focus on: Barclaycard offers lowest ever balance transfer fee of 1%
If you have credit card debt that you want to transfer onto a different card which offers an interest-free shelter, you will be charged what's known as a balance transfer fee. Generally speaking, this is usually around 3% of the balance you are switching across.
However, Barclaycard has just launched a competitive new deal that will charge you a balance transfer fee of just 1% - which, notably, is the lowest balance transfer rate that Barclaycard has ever offered.
As the fee is calculated in percentage terms, this is great news for those with larger debts. That said however, it only offers 12 months in which to clear it. Here we take a look at the small print of the new Barclaycard and investigate whether it could be the best deal for you.
What's the deal?
The Barclaycard Platinum Balance Transfer deal offers 0% interest on balance transfers for 12 months, and comes with a low balance transfer fee of 1%. Note the maximum you will be able to transfer is 90% of your agreed credit limit.
When this interest-free shelter on your existing debt comes to an end, you will be charged an annual percentage rate (APR) of 19.9% (variable) - on an assumed credit limit of £1,200. The same rate will apply to purchases from the word go.
This is by far the main draw of the Platinum Balance Transfer card - however it does offer contactless technology - which is a quick and easy way of making purchases of £20 or less.
In addition, applicants who are accepted for the Barclaycard Platinum Balance Transfer card will automatically have their account set up with paperless statements, meaning you will be able to manage your account online straight away.
While the balance transfer fee is only 1%, you will actually be charged 1.2% of the balance at the point of the transfer as this is how Barclaycard's systems are set up. However, your account will then be re-credited with 0.2% again within the next 28 days. So in the end, you only actually end up paying 1%.
The other downside to this card is that it doesn't come with any 0% period on new purchases.
If you are tempted to apply for the Barclaycard Platinum Balance Transfer card on the above basis, you will also need to act fast. The offer is only taking applications up until midnight on September 30, 2012.
And, as with any credit card, your application will only be successful if you meet the provider's lending criteria. In the case of attractive deals such as this, these can be set quite high.
What's the verdict?
If you have large debts you're looking to clear, this could be an ideal card for you, as the balance transfer fee is so low. You also have a full 12 months interest-free shelter in which to clear your debts.
However, if you think there is a danger that it will take longer than this to pay off your balance, you will be better off looking for a different kind of card. After all, paying even one months' interest at 19.9% (variable) could outweigh any savings you made.
One option is the Barclaycard Platinum Credit Card with Extended Balance Transfer. This offers a market leading 23 months with 0% on balance transfers. And, while the associated balance transfer fee is still higher, it's also been recently reduced to 2.8% - still lower than some of its closest competitors.
Alternatively, frequent visitors to Tesco may prefer its Clubcard Credit Card for Balance Transfers. This offers 22 months interest-free on balance transfers, for a higher fee of 2.9% but it does allow shoppers to earn Clubcard points at a much faster rate than usual. For example, you can earn five points for every £4 spent in Tesco stores, and one point for every £4 spent elsewhere.