Tesco Bank is the first to return to no fee 0% interest balance transfer credit cards
The new Tesco Bank Clubcard Credit Card is the only zero fee balance transfer credit card with a 0% interest period on both balance transfers and purchases for 12 months.
It also doubles up as a Clubcard, allowing customers to receive five points for every £4 spent on their card in Tesco stores, and one point for every £4 they spend elsewhere.
Greater flexibility
David McCreadie, managing director of banking at Tesco Bank, said the no balance transfer fee offer is for customers who want “the flexibility of a great value purchase and balance transfer with the additional benefit of Clubcard points”.
“The Clubcard Credit Card has consistently featured in best-buy tables and this new offer reflects our ambition to continue to offer great value products for customers,” he added.
The news has been welcomed by industry commentators, who say it will provide people aiming to get out of debt with a means of avoiding a balance transfer fee.
Sarah Robb, credit card expert at uSwitch.com, said cards offering 0% on balance transfers can be a “lifesaver” for consumers who are “drowning in debt”.
“They give people a little extra time to pay back what they owe without accruing extra interest,” she explained. “However, you usually to have to pay for this privilege. Not having a transfer fee could remove a hurdle for those trying to break the cycle of debt.”
Game-changing
Despite describing the new card as a “real game-changer”, Ms Robb noted that there is a “trade-off”, as consumers who sign up for the new card will not have as long to clear their balance as some other leading cards on the market, which offer up to 27 months at a rate of 0%.
The plus side is that the absence of a fee can help people to begin paying off their balance right away – something savvy customers could take advantage of by moving their balance to another 0% card in a year’s time.
As the expert explained, Tesco’s new card could ultimately help to change the shape of the market: “If this is a sign of things to come, we could see a move away from long introductory offers to a fee-free balance transfer market.”
“This should lead to more choice and more competitive deals as providers battle it out, leaving consumers as the real winners,” Ms Robb concluded.