Tesco has stormed into the balance transfer market today with a market-leading 12-month 0% credit card with no fees.
The Tesco Clubcard with No Balance Transfer Fee has a 12-month 0% purchase period and whenever you use the card you’ll be able to earn Clubcard points.
This means you can transfer a debt over to the card and pay no fees or interest for a year.
No other balance transfer card offers the combination of no fee and a 0% period lasting as long as 12 months. The card is truly exceptional because it also has a 12-month 0% purchase period, which means you can buy items on the card during the year and not be charged interest.
There is also the added bonus for Tesco shoppers of collecting Clubcard points when using it. When shopping in Tesco or on Tesco petrol you’ll receive five points for every £4 you spend, and you'll get one point for every £4 spent elsewhere.
How does it compare?
When looking at the fees alone this is one of the best credit cards on the market.
The average fee for 0% balance transfer cards is around 2.5% so this is a much cheaper option. It’s also attractive thanks to the extended 0% purchase period and Clubcard points.
If you want a longer interest-free period than 12 months, you can also upgrade to a card which offers 16-months 0% interest and nine months 0% purchases for a fee of 2.9%. At this rate you would pay £58 on a debt of £2,000, but for a smaller fee there are several cards available with longer balance transfer and purchase periods.
Our comparison tables show all the cards on the market but here are the top five with low fees.
Balance transfer card
|
Balance transfer fee
|
0% period on balance transfers
|
0% period on new purchases
|
Fee paid on £2,000 balance transfer
|
1.00%
|
15 months
|
15 months
|
£20.00
| |
1.00%
|
15 months
|
3 months
|
£20.00
| |
1.00%
|
13 months
|
6 months
|
£20.00
| |
1.00%
|
13 months
|
6 months
|
£20.00
| |
1.28% (for June)
|
16 months
|
3 months
|
£25.60
|
Cards with a low fee typically have a much lower 0% period and are therefore suitable for those who don’t want to be stuck with a hefty fee for moving a debt over.
But if you need longer than 12 months to clear a debt, there are better options around. The market-leader, for example, from Barclaycard has a 27-month 0% period, but a fee of 2.98%.
Our comparison tables show the full picture but here I’ve listed the top five cards with the longest 0% periods.
Card
|
0% period
|
Balance transfer fee
|
Fee paid on £2,000 transfer
|
Representative APR after 0% period ends
|
27 months
|
2.98% (for June)
|
£59.60
|
18.9%
| |
26 months
|
2.65%
|
£53
|
18.9%
| |
26 months
|
2.65%
|
£53
|
18.9%
| |
26 months
|
2.99%
|
£59.80
|
17.9%
| |
25 months
|
2.04% (for June)
|
£40.80
|
18.9%
|
How to use a balance transfer card
When you take out one of these cards, the main aim should be to clear the debt in the 0% period. If you don't then you'll have to start paying interest when the 0% period ends. At this point it may be possible to transfer the debt onto a new card but there is no guarantee you’ll be accepted.
These cards have a higher standard interest rate than most credit cards and therefore interest payments can negate any savings you’ve made in the 0% period.
Missing a payment is also dangerous as it can cut the 0% period short, result in a fine or even leave a permanent mark on your credit score.
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