Tesco bucks the trend on balance transfers but savvy consumers could be the winners
Commenting on the launch of the new Tesco credit card, which offers 0% on purchases for 12 months and 0% on balance transfers for 12 months with no transfer fee, Michael Ossei, personal finance expert at** Uswitch.com, says:** “Cards that offer 0% on balance transfers can be a lifesaver for consumers drowning in debt as they give people a little extra time to pay back what they owe without accruing extra interest. 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. And with 0% on new purchases for 12 months – as well as the added bonus of clubcard points on these buys – this card could be a real game-changer.
“However there is a tradeoff – a shorter time to clear the balance. At the moment, the leading balance transfer card on the market offers over twice as long with a 0% rate for 27 months. But it comes with a fee of 2.98%, which would cost cash-strapped consumers £89 if they transfer a balance of £3,000. This card from Tesco is great for those who are able to pay off their debts in a shorter time as they can avoid being stung by a transfer fee.
“For those who are looking for more breathing space from their debts, a longer-term 0% deal could be the better option. However, savvy consumers unable to clear the debt in full could always consider moving any remaining debt to another balance transfer card in a year’s time.
“This card shows yet again how Tesco is proving to be a real contender in the personal finance 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.”
FOR MORE INFORMATION
Charlotte Nunes
Phone: 020 7148 4664
Email: charlotte.nunes@uswitch.com
Twitter: @uswitchPR
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