BarclaycardThe credit card giant has responded to Tesco's market-leading move by upping its cards' interest-free periods.

Barclaycard has revamped its top two balance transfer credit cards, with one of its Platinum credit cards now offering a market-leading 23 months interest free.

Yesterday Tesco changed its balance transfer credit card so that it now offers 0% interest on balance transfers for 22 months. It didn't take long for Barclaycard to respond with a special new deal of its own.


Previously its top offer had been the 22-month Platinum credit card, offering 0% interest for the first 22 months with a balance transfer fee of 2.9%. This has now been rejigged to offer 23 months of interest-free borrowing with a reduced transfer fee of 2.8%.

Meanwhile, the 21-month Platinum card will now offer 22 months of 0% interest, though its transfer fee is unchanged at 2.6%.

Let's take a look at what this means for the best buy tables:

Card

0% period

Balance transfer fee

Barclaycard Platinum Visa

23 months

2.8%

HSBC Visa*

23 months

3.3%

Barclaycard 22-Month Platinum

22 months

2.6%

Tesco Clubcard Credit Card for Balance Transfers

22 months

2.9%

RBS Platinum MasterCard

22 months

3.2%

NatWest Platinum MasterCard

22 months

3.2%

Halifax MasterCard

22 months

3.5%

Virgin Money MasterCard

21 months

2.99%

Nationwide Visa

20 months

3.1%

Nationwide Select

20 months

3.1%

MBNA Platinum Visa

20 months

2.85%

Halifax 20 Month MasterCard

20 months

3%

*Existing current account holders only

As you can see, if you discount the HSBC credit card which is only open to existing current account holders, Barclaycard offers the two top cards on the market.

What makes its cards such clear winners is not only the length of the 0% period, which allow you to spread those repayments, but also the fantastic balance transfer fees.

The importance of the balance transfer fee
Credit card providers do not offer you the best part of two years free from interest as a goodwill gesture. They still want to make a bit of money out of you.

There's two ways they do that. One way is to hope that you don't clear all of your debt by the time the 0% period comes to an end, so that you then start paying interest of around 19% on your debts. That's not a sure thing though.

The other way they benefit is via the balance transfer fee. This is charged at the outset and is a percentage of the sum you are transferring onto the balance transfer card.

Let's take the cards above and see what fee you are looking at paying for a transfer of £5,000.

Card

Balance transfer fee

Transfer fee paid on £5,000 transfer

Barclaycard Platinum Visa

2.8%

£140

HSBC Visa*

3.3%

£165

Barclaycard 22-Month Platinum

2.6%

£130

Tesco Clubcard Credit Card for Balance Transfers

2.9%

£145

RBS Platinum MasterCard

3.2%

£160

NatWest Platinum MasterCard

3.2%

£160

Halifax MasterCard

3.5%

£175

Virgin Money MasterCard

2.99%

£149.50

Nationwide Visa

3.1%

£155

Nationwide Select

3.1%

£155

MBNA Platinum Visa

2.85%

£142.50

Halifax 20 Month MasterCard

3%

£150

So for 22 months of 0% interest, fees range from £130 with Barclaycard to £175 with Halifax, a pretty significant difference. But the good news is there are now plenty of cards offering decent interest-free periods, so if you've got debts you want to pay off, take advantage and use the opportunity get yourself back in the black.

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