Credit card bills for Christmas spending will be hitting doormats this week, but switching cards could save you from paying interest on your balance.
With a balance transfer credit card, you can avoid paying interest on the amount you transfer in for a set period of time – in some cases this can be more than three years.
This will let you repay the debt gradually without having to swim against the tide of compounding interest.
A balance transfer credit card may charge you a one-off fee initially, but then you’ll get a long period where no interest is charged.
It’s important to clear your debt before the end of the 0% period to avoid being charged at the standard APR – typically around 18.9%.
The Which? Money Compare credit card tables let you search hundreds of cards from providers large and small to choose a great deal based on quality of service as well as cost and benefits.
For each of the cards highlighted, we’ve included a link to the Which? Money Compare tables where you can find out more details.
Which? Money Compare table – Balance transfer credit cards – hundreds of cards compared
Pay 0% interest for more than three years
Some cards will let you go more than three years without paying any interest on transferred balances.
The longest 0% deals in the Which? Money Compare tables, offered by Tesco Bank, Halifax and Virgin Money, all give you 38 months to pay down your balance.
The Tesco Bank Clubcard 38 Month Balance Transfer Credit Card charges a 2.7% balance-transfer fee and has an APR of 18.9%.
The Halifax 38 Month Balance Transfer Credit Card charges a 2.75% balance-transfer fee and has an APR of 18.9%.
The Virgin 38 Month Balance Transfer Credit Card charges a 2.79% balance-transfer fee and also has an APR of 18.9% .
Look for a card with no balance-transfer fee
If you can pay off your debt more quickly, a card with a lower balance-transfer fee might be better suited to your needs.
The longest deals in our tables with no balance-transfer fee come from Santander and Halifax, each giving you 23 months to pay down your debt.
The Santander 123 Credit Card has an APR of 18.4%, and offers cashback at major petrol stations, major department stores and supermarkets, as well as on National Rail and TFL travel purchases. It carries a £36 annual fee.
The Halifax 23 Month Balance Transfer Credit Card offers no cashback scheme, but carries no annual fee. It has an APR of 18.9%.
Is a balance transfer credit card right for you?
Although the prospect of 0% interest could be appealing – especially if you have run up daunting debt over the holidays – there are a few things to be wary of when it comes to balance transfer credit cards.
First, some cards only offer the headline 0% period for an initial balance transferred over during a specific window of time after the account is open. If you transfer your balance after this period, you might not get the same long interest-free time.
Second, when the 0% interest period expires, a relatively harsh interest rate will kick in immediately. If you’ve not been able to pay down your balance during that time, you might quickly lose any of the benefit gained by transferring.
Finally, balance transfer cards usually carry a minimum monthly repayment – this can be a percentage of the balance or a cash amount, or both – and if you miss one of these you might lose your interest-free benefits altogether.
Find out more: Which? balance transfer calculator – see how much you could save
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Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.