Borrow interest-free for three years! The best balance transfer credit cards to help clear your debts

Published: 10:04 EST, 9 January 2013 | Updated: 04:07 EST, 23 July 2015

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Generous introductory offers on balance transfer credit cards have been steadily re-emerging in the years since the credit crunch. With proper use they can provide the cheapest escape route for those resolved to clearing their debts.

Freedom: Balance transfer cards are a useful tool to help you get out of debt.

Switching your debts to a balance transfer card can speed up the repayment of debt because most, or all, of your repayment goes toward wiping out the balance and not paying interest. The best deals offer up to two years of 0 per cent interest in exchange for a switching charge.

Those with short to medium-term debts can use such offers to finally get out of the red, while those with much more to repay can look to these cards to provide a lower cost alternative to their existing debts.

But beware: there are caveats to consider and barriers to overcome when applying for such cards (see box).

Many balance transfer cards also come with a 0 per cent period for new purchases as well - card companies aren't providing cheap credit as a favour, they want you to spend more on the card and maintain that new debt, which is much more profitable for them.

Remember, you are trying to repay your debts, not build up more. So think hard before buying anything else with credit.

This is Money has compiled a selection of the best deals currently available in the balance transfer market.

This page is kept updated throughout the year - bookmark it for the very latest developments.

Longest interest-free period cards

Market leader:

The never-ending battle for the top spot of the best buy tables continues, and now you can use a balance transfer card to move your debts and pay them back interest-free for three years.

Barclaycard is a regular at the top of the tables and offers a whopping 36 months on its Platinum Extended balance transfer card - the longest interest-free period on the market.

It is only available direct so you won't find it on comparison websites.

The credit card comes with a 3.5 per cent fee, which means you would pay £35 to transfer over £1,000 from other credit cards.

But if you transfer the balance within 60 days of opening the account you will receive a refund on your transfer fee, bringing it down to 1.99 per cent.

The money will be credited to your account after your balance transfer has been successfully completed.

But you will be hit with 18.9 per cent interest after the introductory period ends. Any amount you transfer must not exceed 90 per cent of the credit limit on the card.

For a similar 2.49 per cent transfer fee (if transferred within three months), Halifax's Balance Transfer Card offers 36 months interest-free on balance transfers and six months 0 per cent interest on purchases. The rate then reverts to 18.9 per cent

Virgin Money recently launched a balance transfer card - the Virgin Balance Transfer Credit Card - that also allows customers up to 36 months to pay off debt moved to the card.

It charges a fee of 2.5 per cent on transfers.

However, the selling point for this card is that it also allows for money transfers, which means customers can transfer their credit card allowance to a bank account - to pay off an overdraft, for example, or other loans.

Virgin charges a 4 per cent fee on money transfers, which means it would cost £120 to pay off a £3,000 overdraft.

Those accepted for the account will also benefit from six months of interest free purchases.

For a 2.79 per cent transfer fee, MBNA, also offers 36 months interest free balance transfers. The card provider also offers 20 months interest free when moving cash to a current account, but this comes with a higher fee of 4 per cent. Standard interest is charged at 18.9 per cent.

Best 0% balance transfers

Chosen by This is Money

Provider

Duration

Barclaycard	36mnth
Halifax	36mnth
Virgin Money	36mnth
MBNA	36mnth
Lloyds Bank	36mnth

Bank of Scotland follows with its own 36 month balance transfer deal charging a 3 per cent fee for shifting debt, while Lloyds Bank offers one month less interest free with a 35-month offering.

Both offer 0 per cent interest on purchases for six months and interest reverts to 18.9 per cent once the introductory periods end.

Barclaycard offers a deal with a 35 month offer which also has a discount on a 3.5 per cent transfer fee meaning you would pay 2.69 per cent.

Tesco Bank offers the same period for the same fee of 2.7 per cent, but you get Clubcard points on spending. However, it only offers three months on purchases.

For a 3.1 per cent transfer fee, Fluid gives 35 months interest free to repay transferred debts.The card does allow money transfers to a current account, costing 4 per cent fee, but free of interest for 12 months.

Credit card deals Of the week

No overseas fees

No ATM or foreign transaction fees

Representative 18.9% APR (variable)

Free purchases

25 months 0% interest

Representative 18.9% APR (variable)

Balance transfer

36 months interest free

Representative 18.9% APR (variable)

Clubcard points

One point for every £4 spent

Representative 18.9% APR (variable)

Money transfer

24 months 0% interest, 1.9% fee

Representative 18.9% APR (variable)

RESTRICTIONS ON BALANCE TRANSFER CARDS

Being approved for a balance transfer card is by no means guaranteed.

In theory, those with the best credit ratings are the most likely to be approved for a card as they will have a history of paying off debt on time and have a stable income.

It is more probable that those with poor credit ratings will be rejected.

Those who are refused should bear in mind that applying for a number of other balance transfer cards in a short space of time will worsen their credit rating.

Many card providers will not allow you to transfer balances from another of its own products, so you should identify the best deal for you outside of your existing providers before making an application.

Some providers meanwhile may only accept your application if you already hold a current account with them.

There are other restrictions you will also have to satisfy, such as having a minimum level of income (generally £10,000-£20,000).

And to take advantage of introductory 0 per cent offers, you will have to transfer your balance within a specified time-frame.

Lowest handling fee cards

For those confident they can pay off their credit card debts in a short space of time, then getting a balance transfer card with a lower handling fee, but lower interest-free period, can limit the extra charges on your debt.

Competition is tight with the top four our five providers offering fees below one per cent and fairly decent balance transfer windows too.

Market leader:

Santander's 123 Credit Card pays out up to 3 per cent cashback on top of a 23 month interest-free window for both purchases and balance transfers - the longest available deal for those wanting to transfer debt and buy items without clocking up extra charges.

Even better, there is no balance transfer fee.

However this is offset by a hefty £24 annual card cost.

Customers that open a 123 Current Account at the same time can avoid this charge for the first 12 months.

You could also get a Santander Credit Card which is fee free, but offers a much lower 0 per cent offer on purchases and balance transfers for 15 months.

Tesco Bank also charges no fee to move debt to its Clubcard Credit Card with No Fee.

It offers 19 months 0 per cent interest on balance transfers but only a single month of interest-free purchases as well as offering clubcard rewards for spending.

After the introductory period ends interest is charged at 18.9 per cent.

Alternatively, Post Office Money's Platinum card effectively charges no transfer fee (by way of a refund if you shift the debt in the first 90 days) and offers 18 months to repay free of interest. It only gives 3 months interest free purchases, but once the introductory deal ends interest jumps to 17.8 per cent.

Halifax recently launched its 16 Month Balance Transfer Card, which allows cardholders 16 months to pay off debt for free.

The fee-free credit card, which is only available online, also offers a 0 per cent interest-free promotion for six months on new purchases.

Lloyds Bank and Bank of Scotland offer 16 months interest free balance transfers, The cards carry a 0 per cent fee on balances transferred within the first 90 days. Purchases are interest free for six months.

Best low rate balance transfers

People who have racked up substantial credit card debt which is unlikely to be paid off within two years can plump for balance transfer cards which offer lower rates of interest.

However, those who are considering this option should seek advice as to whether there might be a better deal to be a had consolidating such debts into a loan, particularly with borrowing rates at record lows at the moment.

Market leader: TSB

TSB leads the pack offering table topping low-rate balance transfer deals.

Both offer Advance credit cards with interest on balance transfers of 4.9 per cent for the first 12 months. After that the rate reverts to the standard card rate of 11.9 per cent which is still significantly lower level of interest than typical credit cards.

You will pay a three per cent transfer fee and in order to get the introductory rate you will have to transfer your balance in the first 60 days.

The cards also come with six months 0 per cent interest on purchases.

See full tables