Focus on Barclaycard

Let's take a closer look at Barclaycard's latest offering.

12:01 02 April 2013

The battle for the longest balance transfer offer shows no signs of abating after Barclaycard announced it was extending the interest-free period on its Platinum Credit Card with Extended Balance Transfer to a whopping 26 months.

 

This announcement from Barclaycard came hot on the heels of Tesco and Halifax announcing they were upping the 0% period on their respective balance transfers - both to 25 months.

So let's take a closer look at Barclaycard's latest offering.

 

What's the deal?

 

Barclaycard is determined to hang on to its balance transfer crown and so has increased the interest-free period on its Platinum Credit Card with Extended Balance Transfer from 25 months to a record-breaking 26 months.

Although only an incremental increase, this means that borrowers now have well over two years to pay down their debt without having to worry about accruing interest - and with card debt sitting at an average annual percentage rate (APR) of 17.32% (variable), that could be a massive saving.

In addition to the balance transfer offer, cardholders will also have six months at 0% interest on purchases.

 

Who's it good for?

 

This is a great deal for anyone who has already built up debt on another credit card as it offers the opportunity to pay down the debt without also forking out interest.

This means that borrowers can pay off more of the principal debt each month and, in theory, get the debt paid off over a shorter period of time - ideally before the 26 month interest-free period ends and the representative APR of 18.9% (variable) kicks in.
 
Any catches?

 

The first and most obvious downside is that any balance transfers are subject to a balance transfer fee of 3.5%, one of the highest on the market. This means that transferring a £3,000 balance would set you back £105.90.

Also, as mentioned above, once the interest-free period ends then any remaining debt will incur interest at a representative APR of 18.9% (variable).

You should also be aware that balances cannot be transferred from another Barclaycard and that in order to apply you must have an annual income of more than £20,000.

 

What's the verdict?

 

This card offers a great option to anyone who is looking to pay down existing (non-Barclaycard) credit card debt as it comes with the longest interest-free balance transfer period on the market.

However, although the 26-month balance transfer offer outdoes the 25 months offered by Tesco and Halifax, the balance transfer fee of 3.5% could be quite prohibitive.

This means you will have to work out which would be the most cost-effective option, an extra month at 0% interest or a lower balance transfer fee. The Tesco Clubcard Credit Card for Balance Transfers comes with a 2.9% fee, while the Halifax Balance Transfer Credit Card has a fee of 3%.

This means that, while you'd pay £105.90 to transfer a £3,000 balance to the Barclaycard, it would cost you just £87 to transfer to the Tesco card and £90 to transfer to the Halifax card.

If you're looking for cards with an even lower balance transfer fee then the MBNA Credit Card comes with a fee of 2% while the Lloyds TSB Platinum MasterCard weighs in at just 1.5%.

This means that transferring that £3,000 balance would cost you £60 with MBNA and just £45 with Lloyds TSB. Both cards also have a lower representative APR than the Barclaycard offering, coming in at 16.9% (variable) and 17.9% (variable) respectively.

However, you'll have to make sure you do your sums as both also come with shorter interest-free periods, MBNA offers 22 months and Lloyds TSB offers just 21 months.

 

Top tip!

 

If you're unsure as to whether or not you'll be able to pay off the balance in full by the end of the interest-free period then it may be worth considering a low rate credit card so you're not suddenly stung by a high interest rate.

For instance, Sainsbury's Low Rate Credit Card comes with a representative APR of just 6.9% (variable) on balance transfers while the Barclaycard Platinum Simplicity offers a rate of 7.9% (variable).

And both cards also offer fee-free balance transfers - time to get the calculator out.

 

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.