Halifax has sparked a credit card price war after it raised its 0 per cent interest period for balance transfers, causing rival Barclaycard to slash fees.
Halifax has increased the interest-free period on its Mastercard credit card from 24 to 25 months.
As a result, Halifax briefly held the top spot in the 0 per cent balance transfer credit cards market.
But previous market-leader Barclaycard, which already offers 25-months interest-free on balance transfers, reacted by slashing fees on its Platinum Visa credit card.
Barclaycard now charges a 2.9 per cent fee for transferring a balance from another credit card, beating Halifax's 3 per cent fee.
This means Barclaycard has now regained its position at the top of the best-buy tables.
Good news for customers
Nerys Lewis, head of credit cards at Confused.com, said Halifax and Barclaycard's credit card war was good news for consumers.
"For consumers that have a large sum of money to transfer, the Barclaycard and Halifax credit cards could be particularly worth considering.
"If you have a balance of £3,000, for example, accruing interest at the average annual rate of 17.9 per cent, you could save £824.73 in interest charges over 25 months by moving your balance to the market-leading card.
"That’s after paying the balance transfer fee and assuming you pay off 1 per cent of your balance plus any charges or fees, on time each month."
Balance transfer wars
At the end of January, Barclaycard became the first card company in the UK to offer 25 months interest-free on balance transfers.
Now Halifax is the second provider to launch a balance transfer credit card with an interest-free period of more than two years.
In the last few weeks NatWest and Royal Bank of Scotland have also increased the interest-free periods on their balance transfer cards.
Both banks have upped the 0 per cent periods to 24 months.
A 'better deal'
This recent activity means customers looking to move existing debt can now potentially get a better deal than ever before, said Lewis.
"The battle of the balance transfer credit cards has just got even hotter.
"This time last year HSBC offered the best 0 per cent balance transfer period with 23 months and a handling fee of 2.9 per cent.
"So you’re getting two extra months with Halifax and Barclaycard, for about the same fee."
0% on purchases
What’s more, both Halifax and Barclaycard's balance transfer cards come with a 0 per cent introductory period on purchases.
Barclaycard offers six months interest-free, while Halifax offers three months at 0 per cent.
However, only new customers can apply for these cards.
So if you need to shift your debt from either a Barclaycard or a Halifax card, then you'll have to look at switching providers.
Lewis added that top balance transfer credit cards are likely to only accept people with an excellent credit rating.
Read how to find a 0 per cent credit card to match your credit rating.
Lewis added: "With this in mind, Confused.com offers a free credit Card Matcher service that can help you to judge whether your application for a credit card will be successful before you apply."