Balance Transfer Credit Cards: The interest-free deals keep on adding up

Banks continue to boost interest-free credit card deals as they appear to loosen lending spigots in the face of the UK’s vaccine rollout and recovery from the coronavirus pandemic.

Barclaycard, MBNA, Sainsbury’s Bank and Virgin Money have all increased balance transfer term and purchase terms by 0 per cent since January, in one case by up to four months.

While the number of credit card deals available remains below the pre-pandemic levels seen last March, availability has been rising steadily in recent months helping to spur competition.

There are more credit cards available than there were a few months ago

There are more credit cards available than there were a few months ago

Last August saw the number of available interest-free and credit card transfers reach an all-time low, according to figures from Moneyfacts, as banks turned off their lending faucets.

The average length of deals has also fallen by 0 percent to levels not seen in half a decade.

But while availability remains below the 80 balance transfer deals and 75 buy deals available in March 2019, the numbers have rebounded slightly to 59 and 56 at the start of this month.

This is the money it was reported back in January how some banks beefed up the lengths of their interest-free terms, and the trend has continued since then.

What are the best offers?

Sainsbury’s Bank now offers their longest-running balance transfer deal, with 29 interest-free months available from the date the card is issued. It charges a fee of 3 per cent on the amount transferred with a minimum of £3.

The minimum payment per month is 2.25 per cent of the statement balance, or £5, whichever is higher, while also offering 0 per cent interest-free on purchases for three months and a representative annual interest rate of 21.9 per cent.

Meanwhile, TSB offers the longest interest-free purchase term available on a no-fee card. Their Platinum Purchase MasterCard offers 0 percent on purchases for up to 20 months and comes with an annual rate of 19.9 percent.

It also offers up to 20 months interest-free on balance transfers made in the first 90 days, for a fee of 2.95 percent.

Sainsbury’s Bank on 18 January increased the introductory balance transfer period and purchase terms on its dual credit card from 19 months to 20 months.

Virgin Money made a raft of changes to its cards three days later, including increasing the length of two balance transfer deals from 26 and 20 months to 28 and 24 months.

MBNA increased the length of the low-fee balance transfer card by 0 percent from 24 months to 25 months thereafter, and Barclaycard at the beginning of February increased the balance transfer term from 20 months to 21 months.

Although these adjustments are minor, they mean that consumers have more time to pay off debts or large purchases without interest, and indicate that banks have a greater appetite for lending and more confidence in the economy.

Moneyfacts said the average rate of credit card purchases also fell from 25.2 percent in September to 25 percent, the same level it was in March.

The number of credit cards available on its website has increased by 13 percent since the start of 2021, the credit agency Experian said, and the number of interest-free deals up by 22 percent.

The Bank of England’s latest survey found that lenders estimate that more households are looking to borrow in the first three months of this year, with demand for credit cards particularly high.

However, households paid a further £2.2bn out of their credit card balances in January 2021, meaning Britain’s £56bn of outstanding debt is close to a fifth less than it was in the same month in 2020.

It also found that the availability of unsecured credit such as cards and personal loans increased in the last three months of last year, and is estimated to do the same in the first three months of 2021.

Amir Gushtay, Experian, said: “Encouragingly, we see credit availability continuing to grow, so people have more options if they are looking to lower interest rates on their existing debt.

“Before applying for credit, it is important to check your eligibility so that you know your chances of being accepted or not without hurting your credit score.”


Getting approved for a balance transfer card is by no means guaranteed.

In theory, those with the best credit rating are more likely to be approved for the card, as they will have a history of paying debts on time.

Those with poor credit ratings are more likely to be rejected or offered less attractive terms such as a higher interest rate or a shorter interest-free period.

Those who are rejected should keep in mind that applying for a number of other balance transfer cards in a short period of time will cause their credit rating to deteriorate.

Many card providers will not allow you to transfer balances from other products of their own, so you should determine the best deal for you outside of your current provider before placing an order.

Some providers may only accept your application if you already hold a checking account with them.

There are other restrictions such as a minimum income – generally between £10,000 and £20,000.

To take advantage of the 0 percent introductory offers, you may have to transfer your balance within a specific time frame.

Most credit card providers increase the handling fee after the first 60 or 90 days.

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