Meet the cheapest 2 year loan deal going- a credit card
We all know that things have been a bit tight recently, and perhaps we have all turned to our old friend the credit card a little more than we should have, or we will do over the summer holiday period. But with personal loans under £7,500 at their highest rates for years, there is a danger of getting sucked into the trap of never* being able to clear the balance as your monthly payments go mostly towards covering the interest.
But never fear, Barclaycard is here. In a bizarre under-gazumping battle, Barclaycard has now thrown down the 0% balance transfer gauntlet by offering a full 2 year 0% transfer deal on its latest credit card. All you need to fork out for is the 2.8% transfer fee, and you even get £20 off this if you transfer more than £3,000.
Or, if you think you can pay it off quicker, Barclaycard are still offering another deal for 19 months balance transfer for 2.4% fee. Both cards will revert back to a standard (=high) interest rate after the period of 17.9% and 16.9% respectively. And naturally cards are only available to new customers, so if you are already in the Barclaycard net, you’ve had it.
Of course there are other deals available. Until recently the market leader was Halifax’s 20 months 0% with a fee of 3% (for balances up to £3,000) but MBNA, Natwest and Nationwide all offer deals on a 17 or 18 month transfer. And you have to get through the credit screening process first. Barclaycard claim that 1 in 2 of card applications are declined.
So why are they doing it?
Naturally, avid Bitterwallet readers were not born yesterday, and credit card companies are not here to do you a favour. They want to get their plastic claws into you and get their interest from you. After all, who is more likely to spend money on a credit card, someone you know nothing about, or someone who has already run up thousands on a similar card. And once you have the card, despite good old Martin’s admonitions, will you really be able to resist the temptation to spend on it? They are banking on the fact that you won’t.
And as a cardholder, you will normally by (default) join their marketing mailing lists. Whether or not some dodgy individual can sell this list on or not, you are then a sitting duck for attempts to sell you insurance, ancillary products, credit card cheques and anything else they can think of. Nice.
So, dear readers, if you are thinking of dining with the plastic devils, approach the deal with your eyes wide open. As if you would do anything but.
* actually, new rules that came in earlier this year mean that you can no longer be in a position where you are only paying the interest, and allocation of payments against 0% and standard rated purchases is now fairer.