Overspent at Christmas? These great interest-free balance transfer deals could help you pay off your debts more cheaply.
More than a third of Brits increase their spending on credit cards at Christmas, according to lender Aqua.
As a result, a quarter say paying off their credit cards is a high priority for the New Year.
Perhaps you too have overspent in the lead up to the big day – putting presents on your plastic, or tapping into your bank overdraft to cover all that extra food and drink?
If you won’t be able to pay off this debt before interest payments kick-in, don’t despair.
By switching to a balance transfer card you can give yourself some breathing space to clear the debt without incurring any interest charges.
The longest 0% deal ever
The 24-month Barclaycard Platinum credit card is currently the market-leader when it comes to balance transfers.
It gives cardholders a whole two years in which to pay off their debts interest-free. This is the longest 0 per cent deal ever.
The card charges an initial fee equivalent to 3.2 per cent of the amount you’re moving, but this is reduced to 2.1 per cent if you transfer more than £2,000.
This makes it well worth considering for people with larger sums to clear.
Clear your overdraft
If you dipped into your overdraft in the run-up to Christmas, and you’re being charged interest – and bear in mind overdrafts are one of the most expensive forms of borrowing – you may want to consider a card that allows you to perform a money transfer.
A money transfer is where a credit card company transfers funds into your current account.
The MBNA Platinum credit card allows you to do this for a 4 per cent transfer fee.
You then get 22 months in which to pay off the outstanding sum on your credit card interest-free.
Low transfer fees
Not everyone needs two years to pay off their debt.
If you can clear your balance within about a year, a low-fee balance transfer card may be a better bet.
These typically offer interest-free periods of about 12 months, but charge lower transfer fees of around 2 per cent and less.
A good option
The Fluid credit card is a good option: it comes with a handy feature which lets you check if you are likely to be accepted for the card before completing your application.
This should avoid a rejected application harming your credit profile.
The card offers 15 months at 0 per cent interest, while the transfer fee is a low 1.5 per cent.
When it comes to the lowest transfer fee on the market, the Barclaycard Platinum Low BT Fee is the market-leader.
It offers 12 months interest-free on balance transfers, for only a 0.9 per cent fee.
The right card for you
When deciding between balance transfer deals, head of credit cards at Confused.com Nerys Lewis says it is important to think about how long it will take you to clear the balance.
Lewis says: "If you don’t need a 24-month interest-free period, you may save more money by going for a shorter 0 per cent deal with a lower balance transfer fee.
"It’s also important to remember that balance transfer credit cards are generally aimed at so-called prime customers and so only accept people with a good credit profile."
Confused.com offers a Card Matcher service that can help you to judge whether your application for a credit card will be successful before you apply.