Tesco Bank has introduced a new market-leading 0% balance transfer credit card.
The Clubcard Credit Card gives 0% on balance transfers for over two years and comes with a transfer fee of 2.9% and 0% interest on purchases for three months.
The deal sees the supermarket giant sit alongside Barclaycard and Halifax at the top of the balance transfer table, with both providers giving 0% on balance transfers and 0% on purchases for six and three months respectively.
Healthy competition in balance transfer market
Michael Ossei, uSwitch personal finance expert, commented: “Tesco shoppers stand to gain the most from the card as it offers generous loyalty points for every pound spent, yet the offer of 0% for over two years is strong in its own right.
“Today’s launch suggests that a revival of competitive balance transfer deals could be on the cards. Six years ago the longest 0% balance transfer offer lasted 12 months – today this has almost doubled, with Tesco becoming the third provider this year to launch a balance transfer card with an interest-free period of more than two years.
“Competition in the credit card arena is fierce and this move places Tesco Bank head-to-head with Barclaycard and Halifax already offering 25 month 0% periods. However, Tesco has a unique advantage over its rivals as it’s able to tap into a base of over 16 million loyal Clubcard customers.
“With clear insight into consumer shopping habits, Tesco is gearing all of its financial products and services around what the customer wants – with this in mind, I would expect to see Sainsbury’s Bank step up its credit card offering using its base of Nectar customers.”
Supermarket banks finding their feet
Mr Ossei continues: “While Barclaycard has always been seen as the frontrunner in the balance transfer space, supermarkets and high street brands are now finding their footing.
“Market-leading rates and products could soon become the norm for these new players as they start using data and customer insights to develop more appealing financial products for their customers.
“But for the moment, with Tesco now at top of the tables, we have to wait and see how long it will take for Barclaycard to fire back with a new deal of its own.”