Balance Transfer Credit Card with No Fee? Is it Possible?

A question that is frequently posed of the moneymaxim team is whether there is a balance transfer credit card where there is no transfer fee payable. The normal rate for these fees is around 3% so if you have a debt of say £1,000 it's worthwhile trying to avoid it - double the debt and its even more worthwhile.

Whilst occasionally there are promotional periods offering lower fees its very rare that a credit card company undertakes a 'fee free' promotion - and even rarer that that will coincide with the time you want to do a transfer!

However the is a way to transfer debts to a new interest free card with no fees - providing you have a debt that less than your normal months shopping bill - and also to save on the fee if your debt is lower than a couple of months normal expenditure.

Instead of applying for a best buy balance transfer card find the best 'interest free purchase' card - see the table below - the supermarkets such as Tescos and Sainsbury have been traditionally strong in this area.

Once its received instead of using your usual debit or credit card card to pay for your normal shopping in supermarkets, petrol stations, online or on the high street use your new interest free purchase card. And use the funds instead to pay off your debt on the card which is accruing interest.

Don't however use this method if your debts are more than a month or twos expenditure - otherwise the balance transfer fee you will be saving will be lower than the extra interest you will be paying your existing card provider. And whatever you do please don't spend on the new card and decide not to repay the old one - that will end up in disaster!

The good news about using this method is also that these cards do not require as strong a credit rating as some of the balance transfer cards - so they are open to more. If you are however unsure how good your rating is at present you can always run a credit check using a service such as Credit Expert - which is subject to a monthly fee, but allows a 30 day trail period during which a credit check can be run free of charge.

The following table is set to display the best interest free purchase cards, but do feel free to review other card types using the categories at the top of the page.

Balance Transfer Credit Cards

Best Buy Credit Card Tables for Balance Transfer Cards

A Balance Transfer Credit Card can be an excellent way for clearing credit card debts more quickly. Rather than paying the 'standard' rate of interest - normally around 18% or so - you can switch the balance to a new credit card, paying a fee of around 3% - and then get a lengthy interest free period during which you can make repayments without seeing them eaten up by the monthly interest payment. Many borrowers have used this process over a number of cards to manage their debts down.

You normally need to find a credit card company with whom you do not currently have a relationship to be successful in your application - but there is a lot of choice in the market at the moment with competion really hotting up. Both of the companies who are traditionally strong in this market, Barclaycard and the Virgin Credit Card are still heading the tables, but have recently been joined by Nationwide who have become very aggressive in the free balance transfer market.

Recently we have seen the HBOS increase their competitiveness, with the Plus card which is available from both Halifax and Bank of Scotland now sporting a 13 month balance transfer period, whilst their All in One card now has 12 month interest free periods for both balance transfers and purchases. Full details on our full balance transfer comparison tables.

Remember that you cannot transfer balances from a card which is part of the same company any new card is with (Virgin Money Credit Card is run by the MBNA group).

As the fees involved in taking a balance transfer differ from card to card the cheapest card will depend on the length of time you wish to borrow for - we suggest you consider the maximium period you wish to take an interest free balance transfer for, and then find the one offering the lower balance transfer fee offering that period - this can be easily identified using the table above.

If you are looking for an alternative type of card (such as an long interest free purchase, cashback or reward card please refer to our credit card index.

If you want to discuss the ins and out of balance transfer credit cards do not hesitate to call the moneymaxim customer assistance team.

Last updated 17th May 2011