New market-leading interest-free credit card
If you've spent too much on your credit card in the run-up to Christmas, HSBC could help you out with a market-leading 0% period. Fantastic!
If you have some debt on another credit card, you could transfer it over to the HSBC MasterCard and not pay any interest on the debt for 23 months, subject to a 3.3% fee.
That means all your monthly repayments will go towards paying off your debt rather than on exorbitant interest charges.
Previously the HSBC card came with a 15-month 0% period, but if you sign up for the card between December 22nd and January 31st, you won’t have to pay any interest for 23 months! No other card offers such a long period for 0% balance transfers, so this is a very attractive offer.
HSBC has made this offer as part of its January sale where it’s offering great rates on several financial products. To read about its excellent new bank accounts, read Santander beaten by new 6% interest current account.
A couple of catches
However, there are two catches with the credit card offer. Firstly, you can’t get this card if you already have a credit card with HSBC. And secondly, you need to be an HSBC current account customer.
I’m not surprised that HSBC is restricting this offer to existing customers. More and more banks are making this kind of offer because they want to ‘own’ their customers and serve all their financial needs.
Although I’m not surprised by HSBC’s restrictions, I do think it’s a shame that things are moving in this direction as I don’t think it’s in the best interests of customers. I’d rather get different products from different banks and get the best deal every time.
Don't lose heart
Still, if you’re not eligible for HSBC’s offer, please don’t lose heart. There are several other 0% balance transfer cards out there that are almost as good.
I particularly like the Barclaycard Low Fee Platinum Visa. The 0% period is only 16 months, but the balance transfer fee is nice and low at 1.6% - much lower than HSBC’s 2.9% fee. So if you think you’ll be able to pay off the debt over, say, a year, this card makes more sense because you’ll be paying a lower fee.
However, if you don’t pay off the debt within the 16-month 0% period, you’ll either have to pay super-high interest rates on the remaining debt or transfer to another card and pay a further fee.
If you’re going to need longer than 16 months, take a look at the Barclaycard 22-Month Platinum Visa. As the name suggests, this card has a longer 22-month 0% period but you’ll have to pay a higher fee at 2.9%.
Of course, if your existing credit card debt is already on a Barclaycard, you can’t transfer it to another Barclaycard. Instead you’ll have to go for the Halifax MasterCard. It also offers a 22-month 0% period, but the balance transfer fee is higher at 3.5%.
Before I finish, I should emphasise that not all applicants will get a 0% credit card. That’s because the credit card providers are only really interested in people with good credit ratings.
What’s more, 0% cards don’t solve your debt problem in one stroke. Yes, they make it easier for you to pay off the debt because you won’t have to pay any interest, but the money still has to be paid back at some point.
That can be tough, but there is help available if you need it. You could get free debt advice from the following charities: National Debtline, the Consumer Credit Counselling Service or Citizens Advice.
Regardless of whether you get advice from the debt charities or whether you take out the HSBC card, I hope 2012 is the year you clear all your credit card debt. Good luck!
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