Best balance transfer and 0% purchase cards
Choosing the right card can be a difficult task but Moneywise has sifted through the plastic to find the very best credit cards to suit a variety of spending patterns.
Our weekly round-up contains all the best buys, putting you in charge of your money and letting you know how to get the most out of your plastic. Before you take the plunge however, it is worth thinking about what you want a credit card to do and what you want to use it for.
If you are going to spend large amounts, find a credit card offering 0% on purchases - ideally one with a long interest-free period that charges a reasonable interest rate after the introductory deal. Alternatively, if you will be clearing your balance in full each month, you may do better out of a cashback or reward card.
If you’re planning to use your card abroad watch out for exchange rate fees. These are easily missed, and can cost 5% or more of your withdrawals. We’ve rounded up the best fee-free cards to take abroad here.
Finally, if you already have credit card debt, you might want to find the best credit card for balance transfer deals - preferably one charging 0% on balance transfers. But don't forget to look out for the fees too.
Here's our line-up of the best credit cards for rewards and cashback.
Best 0% purchase cards
This offers a market leading 29-month interest free period, with an 18 month 0% interest for balance transfers (subject to a 3% fee). You’ll earn 1p worth of Nectar points for each £1 you spend in Sainsbury’s, and 1p worth for every £10 you spend elsewhere.
MBNA All Round Credit Card
0% on spending for 29 months, representative 18.9% APR variable.
This card charges no interest on purchases for 29 months, rising to 18.9% APR after this period. The card also offers 0% on balance transfers for up to 29 months (with a 2.95% fee) and 0% on money transfers for up to 29 months from the date your account is opened (subject to a 4% fee).
Tesco Bank’s Clubcard Purchase Card
0% on spending for 28 months, representative 18.9% APR variable.
Tesco's card charges no interest for 28 months, providing you don’t go over your credit limit or miss a payment. It charges no interest on balance transfers for three months, with a 2.9% fee. You’ll earn Clubcard points worth 1p per £1 you spend in Tesco and 1p worth of points for every £8 you spend elsewhere.
Top balance transfer cards
If you are in debt then a balance transfer card, if used properly, can be a great way to manage that debt and reduce the amount you’ll need to pay back.
Look for a card that offers a substantial 0% period, so you can clear your debt before it reverts to its normal APR and you end up paying interest. Remember 0% interest doesn't mean free - many of these cards will charge a balance transfer fee.
Santander All in One Credit Card
0% balance transfer for 41 months with no transfer fee, representative 21.7% APR variable
Our top pick comes with a 0% balance transfer for 41 months and no transfer fee, although this card does have an ongoing £3 monthly account fee. It also offers 0% on purchases for six months.
Halifax 43 Month Balance Transfer Credit Card
0% balance transfer for 43 months with 3.28% transfer fee, representative 18.9% APR variable
If you’re willing to pay a balance transfer fee then Halifax's card could be for you. It has a promotional balance transfer offer with 43 months interest free, with a one off 3.28% balance transfer fee.
Best for money transfers
But remember to watch out for the high fees associated with these accounts - you can often pay between 3% and 4% for money transfers.
Virgin Money Transfer Credit Card
0% money transfer for 32 months with 1.99% transfer fee, representative 19.9% APR variable
Our top pick comes from Virgin Money which offers a 32 month money transfer credit card with a low 1.99% fee.
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.
Moving money from one account to another, whether switching bank accounts or more likely transferring the outstanding balance on your credit card to another card that charges a lower – or 0% – rate of interest. Some card providers may charge a transfer fee that can be a percentage of the balance transferred.
This is used to compare interest rates for borrowing. It is the total (or “gross”) interest you’ll pay over the life of a loan, including charges and fees. For credit cards where interest is charged at more frequent intervals, the APR includes a “compounding” effect (paying interest on interest). So for a credit card charging 2% interest a month (equating to 24% a year), the APR would actually be 26.82%.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.