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

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. 

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 now offer over three years of 0 per cent interest in exchange for a switching charge.

Interest freeze: An extended 0 per cent interest term can help borrowers clear their debts quicker

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) below.

Many balance transfer cards also come with a 0 per cent period for new purchases as well.

Avoid the traps 

The crucial thing to remember is that card companies aren't providing cheap credit as a favour. 

They want you to not clear debts during the 0 per cent period and spend more on the card, which makes them money.

Avoiding falling into this trap is the key to balance transfer success. 

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 

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: 

Halifax offers to waive the transfer fee on its 25 month balance transfer deal if you make your transfer within the first 90 days.

It gives 6 months interest-free purchases and comes with a standard rate of 18.9 per cent.

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

It offers 24 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. 

The APR is 18.9 per cent however balance transfers clock up interest after the introductory period at a rate of 20.626 per cent while purchases cost 18.941 per cent. 

Santander's 123 Credit Card also charges no balance transfer fee on top of a 23 month interest-free window for both purchases and balance transfers.

However this is offset by a hefty £36 annual card cost.

The card does come with some extra perks. It pays out up to 3 per cent cashback on your spending at supermarkets, department stores, petrol stations and on National Rail and Transport for London travel.

New and existing customers with 123 Current Account get the card free for the first six months. 

Post Office Money's Platinum card gives borrowers 22 months interest-free balance transfers with a 0 per cent handling fee. 

You get three months free purchases as part of the package, but once the window ends interest is applied at the standard rate of 17.8 per cent.  

Credit card deals Of the week

0% interest

40-month balance transfer deal

Representative 18.9% APR (variable)

Purchase card

27 months 0% interest purchases

Representative 18.9% APR (variable)

Holiday spending

Free spending and withdrawals abroad

Representative 12.9% APR (variable)

5-year low rate

4.9% transfer & purchase rate

Representative 8.9% APR (variable)

0% transfer fee

24 months 0% on balance transfers

Representative 18.9% APR (variable)

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 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: MBNA 

MBNA offers a temporary interest rate of 4.9 per cent on balance transfers for 60 months.

What you get 

After 60 months, the rate does jump to 8.9 per cent but this is still relatively low compared to the standard 18.9 per cent APR attached to most cards. 

Purchases made within the first 60 days also qualify for the promotional rate.

Moving a balance to the card will incur a fee of 0.5 per cent, which works out at £5 for every £1,000 you transfer.

To clear a £3,000 balance with a £15 transfer fee would cost £381 in interest if you were to take the full 5 years repaying £56.76 each month. 

Any alternatives? 

 AA recently launched a new low-rate credit card charging 6.4 per cent interest on both balance transfers and purchases matching the like of those on offer from Bank of Scotland, Lloyds Bank and Halifax - which are all part of Lloyds Banking Group. 

The AA charges no annual fee for the card but the unique draw is that it won't charge handling fees for balance transfers made at any time.

Band of Scotland, Lloyds Bank and Halifax also promise free transfers but limit this to the first 90 days of account opening. 

This means the AA's option would be a better long-term option.

Borrowers who are accepted for the deals but have a less than perfect credit score may be still be given the low-rate cards but at a higher interest rate of 10.4 or 14.9 per cent APR.