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By David Stevens
Personal Finance Correspondent
Monday, 30 June 2008 |
Is Egg Credit Card Best For Balance Transfers
Apply for a Balance Transfer credit card:
What to look out for when you compare balance transfer credit cards:
- How long is the interest free balance transfer period?
- Are there breaks in the interest free period? If so, how will this affect you?
- What is the transfer fee, and is there a cap on this?
- Have you used a balance transfer credit card calculator (such as on this site) which will tell you whether you'd be better off with a low rate life-of-balance credit card instead?
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AS ‘the crunch’ tightens its grip on our wallets, more and more Britons are finding good old balance transfer credit cards a convenient way to keep the wolf from the door a few months longer.
But could you be losing out on the best balance transfer credit card deal by not comparing balance transfer credit cards carefully enough?
Balance transfer brand awareness
When it comes to brand awareness, the Egg credit card is without doubt the Coca-Cola of the credit card world and – not surprisingly given it single handedly popularised the notion - the balance transfer credit card market too.
With their best buy table-topping 0% balance transfer rates, you are more likely an Egg credit card in your neighbour’s wallet than any other card.
But your neighbour may well be getting a bad deal, or - put more correctly – may well not be getting the best balance transfer deal available.
So why does everyone flock to the Egg credit card when they want the best balance transfer credit card?
More than likely because it offers a collective 0% interest on balance transfers for a whopping 20 months, which shunts it right to the top of the best buy tables where it blinds customers with its glowing halo.
Egg not all it’s cracked up to be
Ironically, despite the lengthy 0% balance transfer period, the Egg card is perhaps not all it is, ahem, cracked up to be.
The 20 month zero percent balance transfer rate is actually split between three different time periods:
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You get 0% on balance transfers until 1 September 2009
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You get another 5 months in 2010
- And another 5 months again on the card’s anniversary in 2011
In between those periods, you’ll have to pay 16.9% APR which is not market beating by any stretch of the imagination.
Customers comparing balance transfer credit cards would do well to look at the balance transfer credit cards that sit below the Egg credit card’s pole position.
Virgin Money credit card
The Virgin Money credit card, for example, offers 0% on balance transfers for 15 months in a row – that’s five months longer than Egg’s longest uninterrupted 0% balance transfer period.
It also has a marginally lower transfer fee (2.98% rather than Egg’s 3% which could save you enough for a Mars bar) and at 15.9%, an APR a full point lower than Egg’s equivalent.
 Read full review of Virgin Money credit card...
Capital One Platinum credit card
The Capital One Platinum credit card, while perhaps more difficult to get as you must have a decent credit rating, matches Egg’s initial 0% balance transfer period, but it trumps Egg on two fronts: APR and purchases.
The Capital One Platinum credit card boasts a surprisingly low APR of 12.9% which brings it down almost to the levels of the low-rate Life of Balance balance transfer credit cards.
But more surprising is the 0% introductory purchase rate that lasts the same period as the 0% balance transfer rate which means – unlike other balance transfer credit cards that try to trap you into spending on the card but don’t let you pay it off until your balance transfer has been cleared – you can spend away and enjoy almost a year of 0% interest on your purchases too.
Review a full review of Capital One Platinum...
The Halifax All In One credit card, the Capital One Mastercard and the GM credit card are the only other balance transfer credit cards that are suitable for spending on too, but the lengths of their interest free period are much shorter.
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