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Cheapest 0% balance transfer deals for a decade

Fees haven't been this low since October 2006

Cheapest 0% balance transfer deals for a decade

The cost of shifting credit card debt onto a 0% balance transfer credit card has fallen to the lowest level in over a decade according to new analysis, which means it’s a great time to act if you’ve got multiple balances to move.

The Moneyfacts UK Credit Card Trends Treasury Report reveals the average balance transfer fee fell from 2.29% in December 2016 to 2.03% in December 2017 – the lowest since October 2006 when the typical cost was 1.82%.

Which? takes a look at why smaller balance transfer fees are good news for those looking to move credit or store card debt from multiple cards and picks out the cheapest longest-lasting 0% balance transfer options to go for.


Why balance transfer fees matter

A 0% balance transfer credit card is a great tool to cut the interest you pay on exiting credit or store card debt.

They allow you to move balances from expensive credit or store cards and freeze the interest for a set period. This gives you the chance to pay the debt down in a manageable way and ensures all your payments go towards clearing what you owe.

  • Find out more about 0% balance transfer cards and how they work in our guide

However 0% balance transfer deals typically attract a balance transfer fee for the privilege of helping you tackle debt, which can be as high as 3.49%.

This is a one-off charge that applies to each balance transfer you do, so if you have debt you want to move from multiple cards, the costs can really add up.

The table below shows what £4,500 worth of debt on three separate cards would cost to shift onto a 0% balance transfer deal with a 3.49% fee and a 2.03% fee.

Cost of moving onto a 0% balance transfer card with 3.49% fee Cost of a 0% balance transfer card with 2.03% fee
Card one: £2,000 balance £69.80 £40.60
Card two: £1,500 balance £52.35 £30.45
Card three: £1,000 balance £34.90 £20.30
Total cost £157.05 £91.35

 

How to find the best 0% balance transfer deal

When shopping for a 0% balance transfer credit card you should consider the length of the 0% period and the size of the balance transfer fee.

In general, the longer the deal lasts, the higher the fee will be. But sometimes there’s no rhyme or reason to fees so it’s better to try and find a deal that fits your situation.

You can do this by working out how much debt you need to shift from your credit card/s and store card/s and then divide the total amount by what you can afford to repay each month.

This will give you your ideal 0% period, which you can use to help you shop for a card with the smallest balance transfer fee.

So if you had £4,500 worth of debts and could afford to repay £150 a month you would need a card with a 0% period lasting at least 30 months.

The cheapest longest-lasting 0% balance transfer deals

Here are the longest-lasting 0% balance transfer credit cards on the market right now with fees under 1%. We’ve ordered the table by length of the 0% period. 

0% balance transfer period Balance transfer fee Cost of moving £2,000 from one card  Representative APR
Santander All in One Credit Card* 39 months 0% £0 21.7%
Lloyds Bank Platinum 33-Month Balance Transfer Credit Card 33 months 0.57% £11.40 18.9%
Virgin 32-Month balance Transfer Credit Card 32 months 0.6% £12 20.9%
HSBC Advance Credit Card 32 months 0.6% £12 18.9%
Virgin 30-Month Balance Transfer Credit Card 30 months 0.55% £11 20.9%

*£3 monthly fee

Source: Which? Money Compare

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.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of a provider before committing to any financial products.

Categories: Credit cards & loans, Money

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