Halifax and Lloyds offering 34 months of 0% on credit card transfers

http://www.theguardian.com/money/2014/dec/31/credit-card-halifax-lloyds-zeron-interest-transfer

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Consumers juggling credit and store card debts built up before Christmas are being wooed with balance transfer deals offering 0% interest for almost three years.

Halifax and Lloyds Bank have both just launched their “longest ever” interest-free balance transfer cards – a few days before the first set of post-Christmas bills are due to start landing on doormats around the UK.

Card companies claim many people with existing credit and store card debt could save hundreds of pounds by transferring these balances to another provider offering a better rate.

There are scores of cards on the market offering 0% interest on these debt switches for a set period, though to get the best ones you will typically need to have a very good credit rating and be earning above a minimum amount. And there is invariably a fee to pay for the privilege.

The new Halifax and Lloyds Bank cards each offer 0% interest on balance transfers for 34 months. However, they have not succeeded in taking the very top spot in the best-buy tables; a few days before Christmas, Barclaycard launched a 35-month deal, which claimed to be the UK’s longest balance transfer.

Transferring £2,000 of debt on a card with an APR of 18.9% to the Halifax deal could mean a customer would be £792 better off over the 34-month period, according to the bank.

The main benefit of a 0% deal is that all of your monthly repayment goes towards the outstanding balance, and therefore the debt can be cleared more quickly.

Aside from Barclaycard, Halifax and Lloyds Bank, other providers offering longer-than-average balance transfer offers include HSBC (34 months), and Sainsbury’s Bank and Tesco Bank (both 33 months).

But all of the above charge a fee in the form of a percentage of the debt moved over. These vary, though around 3% is typical with the longest offers. In the case of Barclaycard’s 35-month deal, a fee of 3.5% is applied, though it is reduced to 2.49% by a refund. The Halifax and Lloyds cards each carry a 3% fee (Halifax will refund 0.2% within 90 days, giving an effective fee of 2.8%).

The other thing to watch out for is that, depending on their credit score, some of those who apply for these eye-catching deals may be offered a shorter 0% balance transfer period and/or a higher “go to” annual interest rate.

For example, Lloyds says that at least 51% of customers will receive its “best offer” of 0% on balance transfers for 34 months and a representative rate of 18.9% APR. Others will either receive 0% for 34 months and a rate of 21.9% APR, or 0% for 26 months and a rate of 25.9% APR.