“Fee-free” credit card balance transfers are making a comeback

Several credit card providers have decided to resurrect the notion of no fees on credit card balance transfers. Undoubtedly this move will be welcomed by lot of borrowers who are prdicted to swap a staggering £6.68billion between cards over the next 6months.

‘Free’ balance transfers have been getting phased out over some time, with only the occasional one or two remaining last year, and customers then faced incurring a fee of anywhere between 2-3%.

Generally speaking, ‘fee-free’ deals do tend to offer shorter introductory rates compared to those which charge fees, and they tend to be offered to those customers whose credit histories are impeccable, so if you have any doubts over your credit rating and have a rather large balance you wish to transfer, you may still actually be better off in the long run going for a card offering competitive, long-lasting interest rates.

Recent research carried out on behalf of Sainsbury’s bank estimate 4.3million people will transfer their credit card balances over the next 6months. The estimated total of these transactions is approximately £36.74million a day, which totals £6.68billion. On average each customer transfers £1555, but 181,000 plan to swap over £5,000 and 95,000 people expect to swap more than £10,000.

Head of cards at Sainsbury’s says that their research indicates more than 5million people with outstanding balances. They recommend that when selecting a balance transfer card, you should check to see if any new/additional purchases are also covered by the 0% offer to help you calculate your monthly repayments and put you more in control of managing your finances.

Despite these figures, there are always the group of people who do clear their balances every month. For these types, the recommendation is to shop around for the card which offers you, the individual, the most benefits to your lifestyle, bearing in mind, this may not necessarily be the 0% transfer credit cards. Those with clear balances at the end of every month may find it more beneficial to subscribe to a ‘rewards’ type of credit card, whether that be loyalty points, airmiles or cashbacks.