Barclaycard is the latest credit card provider to up the ante as fierce competition between banks leads to better credit card deals for customers.
Competition is returning to the credit card market and longer term balance transfers have become the new battleground.
Right on the heels of a card with a 20 months’ interest-free deal on balance transfers, Barclaycard has introduced the Platinum Extended Balance Transfer Visa. This new card offers 24 months’ interest-free on balance transfers – the first of its kind in the UK.
After a competitive 2.8% fee on balance transfers, card holders then don’t pay interest on transferred balances for two years. This can help many struggling consumers to consolidate their credit card debt and relieve themselves of mounting interest payments.
Moneysupermarket.com’s credit card spokesperson, Hannah-Mercedes Skenfield, commented: “This means a consumer making just the minimum payments on a UK average card balance of £2,221 could save up to £597 over the lifetime of the promotional deal, even once the balance transfer deal has been factored in.”
While this sounds like a good deal, consumers should be aware that any purchases on the card will attract an average APR of 18.7%.
Alternative longer-term interest-free deals on balance transfers are also being offered by MBNA and Virgin Money, which both offer 0% for 19 months.
For customers wanting to take advantage of the new deal, it remains to be seen just how many will qualify for the card. uSwitch.com’s Stefan Maryniak has noted that Barclaycard’s previous 20-month interest-free balance transfer offer was in practice hard to get for any customer who didn’t have a very good credit rating.
Moneyhighstreet.com comments: “This is a great deal for consumers – if they can get it. The problem is that many of the people for whom it could be most useful may not have the necessary credit rating to qualify.
“If you can get this or a similar long-term interest-free deal on balance transfers, it can be a good way to manage your budget by consolidating your credit card debt and temporarily saving you from costly interest payments.
“As competition increases, however, more deals will become available. To find the best ones, be sure to compare interest rates and fees online.”