0% credit card latest – it’s not all about the length, but how you use it!

Andrew Hagger of Moneycomms.co.uk takes a look at the latest moves in the credit card market following new deals launched by Barclaycard and MBNA in the last week.

Barclaycard remains firmly in number one position in the balance transfer best buys with its latest 24 month offering at 0% on its Platinum Balance transfer deal, however MBNA has also re-joined the fray with its longest ever interest free promotion of 22 months.

There’s a danger that some consumers will focus purely on the length of the interest free incentive, even though they may not require or intend using the full 20-24 month 0% term on offer.

If that’s the case, then it’s sensible to look at the balance transfer fee, as there are some decent savings to be made, particularly if you’re intending switching a sizeable sum.

The following table illustrates that if you’re tempted to opt for the 23 month 0% card from NatWest the one off cost works out considerably more expensive than deals offering a month less interest free.

Card 0% Term BT Fee Cost to switch £3,000 Cost to switch £5,000 Cost to switch




24 months 2.80% £84.00 £140.00 £252.00


23 months 3.50% £105.00 £175.00 £315.00


22 months 2.85% £85.50 £142.50 £256.50


22 months 2.90% £87.00 £145.00 £261.00


Although Barclaycard and NatWest are offering a longer introductory period, it’s worth noting that with the MBNA deal you are not restricted to just paying off other card balances.

In return for a one off 4% Money Transfer fee, you can have the 0% funds paid into your current account, and this flexibility opens up a number of other money saving options if you’re disciplined with your plastic.

It’s a clever way to clear your overdraft on the cheap (particularly if you’re smart enough to repay the card within the 22 month intro deal) also it’s a much cheaper than taking out a small personal loan where the rates are really high.

You may be able to get 5.4% APR if you want a loan £7500 plus, but if you’re only borrowing say £3000 you can save between £350 and £775 in interest charges by using the money transfer option from MBNA


The following table highlights just how much cheaper this option can be:

Cost of £3000 personal loan 24   months
Lender Rate Interest charged
Tesco Bank 15.9% APR £486
M&S Bank 16.9% APR £516
HSBC 18.9% APR £575
NatWest 20.9% APR £634
Halifax 29.9% APR £896
MBNA – Money Transfer

(Max 22 months)

One off 4% fee £120
Calculations: MoneyComms 22 Nov 2012



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