Virgin Money has launched a new low-fee balance transfer card offering 26 months at 0% interest with a handling fee of 0.26 per cent.
The new deal, released to celebrate the London Marathon, also offers 26 months 0 per cent on money transfers for a 4 per cent fee and three months of interest-free purchases. Once the introductory deals end interest jumps to 18.9 per cent.
The deal is only on the table until April 26 and the provider is offering those who open account the opportunity to win one of six free entries to the 2017 Virgin Money London Marathon as part of a prize draw.
London Marathon: Virgin Money is offering successful applicants the opportunity to win free marathon entry
Chris Taylor, director of credit card products at Virgin Money, said: ‘Our new 26-month card celebrates the world famous Virgin Money London Marathon.
‘Reflecting the distance the runners will tackle, our 26-month card is a competitive product offering customers the perfect opportunity to manage their financial situation.’
Is it worth signing up?
Although the potential for free entry for 2017’s London Marathon may be a tempting prospect for keen runners, you should, of course, avoid being persuaded to sign up by an eye-catching promotion.
The stand-out feature of Virgin’s new 26-month London Marathon offering is the low transfer fee, which at 0.26 per cent would cost someone transferring a £2,000 balance just £5.20.
|Transfers to be made within 90 days of account opening or a 3% transfer fee applies. Comes with 6 months of 0% on purchases.|
|Santander (18.4% APR)
|No transfer fee and 23 months of 0% on purchases but a £3 monthly fee applies on this 123 credit card – which works out at £69 over 23 months.|
|No transfer fee applied but only transfers made within 3 months of account opening will get the 22-month interest-free term.|
||Transfers to be made within first 90 days of account opening or a 3% fee applies. Earn ClubCard points on your spending.|
|Correct as of April 1 2016|
This means anyone able to repay their credit card debt within 26 months could save as much as £54.80 compared to a typical balance transfer credit card that comes with a transfer fee of 3 per cent.
Currently there are a handful of deals charging no transfer fee at all as long as you transfer a balance soon after account opening (see table, right).
Halifax waives the transfer fee as long as a balance in transferred within 90 days of account opening, before reverting to a fee of 3% of the balance.
Sainsbury’s doesn’t charge a transfer fee at all – no matter when the balance is transferred – but the 123 credit card comes with a monthly fee of £3. The first six months’ charges are refunded to new and existing customers but this still means that over 23 months, it would cost £51 to run the account, and by comparison, over the 26 months the Virgin deal lasts for, the Santander 123 card would cost £60. The Virgin cost, as mentioned above, is just £5.50 over 26 months.
If you think you may need longer to repay your debt than then 26 months Virgin offers, you could be better off choosing an alternative credit card that gives an extended 0 per cent interest period.
The Halifax and Tesco Bank cards do carry higher handling fees of 2.58 and 2.69 per cent respectively but they offer 14 months’ longer interest free than Virgin Money.
Find out more about the top interest-free balance transfer deals in This is Money’s round-up here.
The Virgin Money deal also includes a 26-month 0 per cent interest money transfer offer, which means you can transfer cash to your current account from your new credit card without being charged interest.
However, the facility does carry a fairly hefty 4 per cent transfer fee, which would cost £80 on a £2,000 transfer.
If you need to pay off an expensive overdraft or existing loan there are several cheaper and longer options on the market.
Tesco Bank’s 40 month balance and money transfer credit card is the longest deal available, charging a 3.94 per cent fee for debt moved from a bank account.
Those looking for a cheaper fee and shorter deal could be better off with Virgin Money’s own 32- month interest-free money transfer credit card with a 1.69 per cent fee.
Watch out for the small print
Borrowers will pay 3 per cent of their transfer amount when the balance transfer is made initially and will then receive a refund of 2.74 per cent of the balance transferred as long as it is made within the first 60 days of opening the account will be refunded 2.74 per cent.
This reduces the transfer fee to 0.26 per cent and the refund will be paid within 14 days of the transfer being processed.
You will need to make sure to clear the debt within the first 26 months as once the introductory period ends interest jumps to 18.9 per cent (APR).
Remember pay late, fail to make a minimum repayment or spend beyond your limit and you risk your interest-free deal being withdrawn.
Courtesy: Daily Mail Online