A NEW top balance transfer card has been launched by a major online bank.
The new 0% balance transfer card gives you more than two years to clear debt with a low transfer fee, making it one of the best deals on the market.
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Virgin Money’s new 0% balance transfer card gives all accepted applicants 28 months to repay money shifted on to the credit card without charging any interest at all.
You will have to pay a 3.25% fee on debt moved to the account. On a balance of £1,000 this would work out as £30.25.
Virgin’s card isn’t the longest 0% balance transfer period on the market. Tesco Bank offers 29 months at zero interest on balance transfers – but crucially this card comes with a higher 3.49% fee.
It means if you can afford to repay your borrowing within 28 months – you’d likely be better off opting for Virgin’s new deal.
Read more on credit cards
Some credit card providers use the headline zero interest period as just an example of what customers can get – usually when they have a squeaky clean credit record.
It means that you may get offered a shorter 0% period if you have some blips on your history.
However, both Tesco and Virgin guarantee that all accepted customers will get the headline 29 and 28 months respectively offered.
Balance transfer cards can be a great way of getting out of credit card debt faster rather than simply chipping away at a balance each month.
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The zero interest periods allow you to pay back more of the underlying debt so that you can pay off your balance quicker and save on costly rates.
However, if you don't repay all the balance before the promotional 0% period ends you will start paying the costly APR linked to the card.
On both Virgin Money and Tesco Bank's balance transfer cards the APR is 24.9%.
I paid of £8.5k of credit card debt using 7 key steps - here’s my top tips including why it’s so important to make lists
It all depends on how long you think you need to repay balances as to which will be the best deal for you.
For example, if you need only need 13 months, NatWest offers a balance transfer card that has no fee at all – the longest fee-free 0% offer.
If you have credit card debt, start by working out how much you can afford in repayments each month.
You can then work out how many months it will take before borrowed money is repaid in full.
Opt for the card with enough time to pay off your debt at the lowest possible fee.
You can compare credit card deals on comparison sites such as Moneysupermarket.com and moneyfactscompare.co.uk.
If you can't repay all the balance during the longest time promotional period, you may need to switch again before the 0% offer finishes.
However, there is no guarantee that you will be able to do so.
When you move a debt from one credit card to another, it's a good idea to close the original credit card or keep it tucked away and use for emergencies only.
This helps make sure you don't end up racking up a fresh debt on the card while still paying off the balance transfer card.
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If you are struggling with debt, you get free help and advice from group and charities including:
- Citizens Advice - 0800 144 8848 (England) 0800 702 2020 (Wales)
- StepChange - 0800138 1111
- National Debtline - 0808 808 4000
How to shift your credit card debt quickly
By James Flanders, Consumer Reporter
UK Finance reports that we spend a whopping £2 billion a month using our credit cards.
While that little strip of plastic makes everyday spending easy peasy, it comes at a huge cost.
According to The Money Charity, the average credit card debt sits at £2,485 per household or £1,312 per adult.
And if you're stuck on a credit card with a high APR and only making the minimum repayments, you could be forking out hundreds of pounds extra in interest charges.
For example, if you owe £1,312 on your credit card and are charged 24.8% APR.
If you don't make any more transactions and pay £100 a month in repayments, you will pay off the card by September 2025 but at £207 in interest.
However, by hunting around for a better deal elsewhere and switching to a balance transfer credit card with a lengthy interest-free period, you can save yourself £162.
If the same person was accepted for a 28-month-long zero-interest credit card with a 3.4% balance transfer fee and made the same £100 repayments each month.
They would pay off the debt sooner, in July 2025, and only fork out £45 towards the 3.4% balance transfer fee.
Before taking out a new credit card or increasing the amount you borrow, it's vital to consider the consequences.
You should only borrow money if you can afford to pay it back.
It's always vital to ask yourself if you need to borrow before committing to a new credit card, personal loan or overdraft.
If you use a credit card, I'd recommend that you always pay off your balance in full at the end of each statement period.
Lenders have a responsibility to help customers who are in debt.
If you're in a debt crisis, your first point of call should be your lender.
They might help you out by offering you a reduced interest rate or a temporary payment holiday - so check in with your lender if you're struggling.
