As summer sizzles, 0% balance transfer credit cards heat up

By Amy Purser Staff Writer Tuesday, 24 June 2008

Best 0% Balance Transfer Credit Cards Apply for the top three 0% balance transfer credit cards Egg Credit Card 0% on balance transfers until 1 Sep 09 (3% transfer fee) More in our Egg review... Apply online now Capital One Platinum Card 0% on balance transfers until 1 Sep 09 (3% transfer fee) More in our Capital One Platinum review... Apply online now Virgin Money Credit Card 0% on balance transfers for 15 months (2.98% fee) More in our Virgin Money credit card review... Apply online now Questions to ask yourself before applying for a 0% balance transfer credit card: How long will the balance transfer period last? What is the transfer fee? Would I be better off with a low-rate life-of-balance balance transfer credit card instead? Am I able to spend on this credit card too, or will my purchase debts not get paid off until the balance transfer is paid in full?

THIS week saw the first official day of summer, and whilst the weather gets hotter, so does the balance transfer credit card market which is back on the radar after a cool period.

Several credit cards offering customers 0% on balance transfers have been launched, relaunched or rejigged, with three main contenders vying for pole position as best 0% balance transfer credit card.

So which balance transfer credit card is best for me?

The Egg credit card offers 0% on balance transfers until 1st September 2009, with a 3% transfer fee.

An unusual, but nonetheless attractive feature of this deal is the additional 0% balance transfers for 5 months they'll give you in 2010 and again in 2011.

Collectively the Egg credit card gives you 20 months of0% interest on your balance transfers, although it's uncertain how valuable the additional 2 x 5 month periods are to most customers.

The Capital One Platinum credit card also gives customers 0% on balance transfers until September 2009, with the same transfer fee of 3%.

With 0% on balance transfers for a 15 month period and a 2.98% transfer fee, the Virgin Money credit card is also a front-runner in the market.

Any drawbacks?

The deals from Egg and Virgin are not suited to those who feel they may spend on the card too, despite the alluring 0% introductory period on any purchases made on the card.

This is because you have to pay the full amount of the balance transfer before anything else, according to the cards’ so-called ‘allocation of payments’ clause in the small print.

For as long as you haven’t fully paid off your transferred debts, any purchases made on the credit card will start to rack up interest as soon as the interest free period – which is much shorter than the 0% balance transfer period.

The differences between the transfer and purchase periods could sting customers who are unaware of this crafty ‘allocation of payments’ trap - thus negating all of the attractive features of such a deal.

Not all doom and gloom…

A Capital One Platinum balance transfer credit card may be the optimum choice for spenders, with 0% on purchases and balance transfers for the same amount of time.

As such, purchases made will not get trapped behind your transferred balance.

So, while balance transfer credit card deals are sizzling hot for summer, spenders should be wary not to get burnt.