A new three-year balance transfer credit card with a set interest rate of 4.9% has been launched by Barclaycard.
It’s the cheapest card on offer of its kind and there is no balance transfer fee, so you won’t be charged for the debt you’re moving over.
Barclaycard deal
This is an impressive offer and means you can transfer over an existing debt onto this card, only having to pay 4.9% interest for three years.
Most credit cards charge around 18% interest so it’s a much cheaper way of borrowing money. The rate also can't be beaten in the personal loan market where the cheapest rate across this term is 5.4%.
For the first six months from opening the card there is also a 0% interest period on new purchases.
Who will it suit?
The card is a little different to other balance transfer cards because although the balance transfer window is 36 months, you’re still having to pay out 4.9% in interest.
If you’re not happy to do this, a 0% balance transfer card might be a better option. However, bear in mind the longest 0% period is two years and there will be a fee to pay for transferring the debt. As a result, this card will be a good option for borrowers who know they are going to need a fair while in order to pay off their debt.
Our comparison tables show a full view of the full market but here I’ve picked out some of the best 0% cards. As you can see with each there is a fee so they're only worth using if the fee is smaller than the amount of interest you’re saving.
Balance transfer cards with 0%
|
Provider |
0% period |
Balance transfer fee |
|
24 months |
2.1% |
|
|
23 months |
1.9% |
|
|
23 months |
3% |
|
|
23 months |
3.5% |
|
|
23 months |
3.5% |
|
|
22 months |
2.85% |
Personal loans
Personal loan rates have been slashed recently.
Right now the cheapest loan available comes from Derbyshire Building Society at 5.4% and this is for loans of between £5,000 and £20,000 for a period of one to five years. Although this rate is higher than the Barclaycard deal, you have longer to repay the debt.
Sainsbury’s Bank has the next cheapest deal at 5.5% for a loan of the same amount. Therefore if you’re looking to borrow more money, over a longer period, a personal loan could be a better option.
Below I’ve picked out the five cheapest loans, which depending on how much debt you’re looking at, may be cheaper to take out than the Barclaycard.
Borrowing £10,000 for five years
|
Loan |
Representative APR |
Total amount repayable |
Monthly repayment |
|
5.4% |
£11,397.60 |
£189.96 |
|
| Sainsbury’s Bank Standard Nectar Cardholder Loan | 5.5% | £11,423.40 | £190.39 |
|
5.6% |
£11,449.80 |
£190.83 |
|
|
5.6% |
£11,449.80 |
£190.83 |
|
|
5.6% |
£11,449.80 |
£190.83 |
More on credit cards:
Top credit cards for Christmas spending
How to build an excellent credit history
Top 0% purchase credit cards for Christmas