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.”
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