For those who use credit cards to manage their debt, balance transfer cards have long provided a way to cut costly interest payments by putting everything in one place.

But the growing popularity of these cards means that the offers available right now are better than ever.

Credit agency Experian saw a 27% increase in the number of people applying for a balance transfer card between September and November of this year, compared to the same period in 2019.

A credit card with balance transfer allows people to pay off their debts by transferring everything they owe to a new card.

This means that they pay interest on one account rather than several, but balance transfer cards often come with a promise of 0% interest for a specified period.

Money Charity estimates that every UK household has an average credit card debt of around £ 2,058, while Moneyfacts reports that the average credit card APR is currently 26.2%.

This means that a customer with a balance of £ 2,058, paying the minimum monthly payment of 3% (£ 61) with an average APR of 26.2% could save £ 1,341 over 34 months by transferring the balance to a card. 0% credit. , even after including a 2.5% (£ 51.45) balance transfer fee.

The temptation to transfer debt using a balance transfer credit card will be all the more tempting as the interest-free offers seem longer and cheaper at the moment.

The average interest-free period on a balance transfer credit card reached its highest level in over three years, while the average balance transfer fee also fell to the lowest level since October 2006, according to Moneyfacts .

The average 0% balance transfer time on credit cards has increased to 577 days, from 548 days in September and 520 days a year ago.

This means that the average interest-free period for credit cards with balance transfer is the longest since November 2018.

Credit cards with balance transfer can help people manage their finances by allowing them to consolidate debt and save money on existing card balances.

In addition, the fees charged when transferring debt to any of these credit cards are also going down according to Moneyfacts.

Average balance transfer fees have fallen from 2.22% to 1.96% in the past year alone, meaning they are now the lowest since October 2006.

Data from Moneyfacts also revealed that there are now 68 credit card balance transfer offers, the highest amount recorded in 2021.

Rachel Springall, Financial Expert at Moneyfacts, said: “As the holiday season approaches, it looks like credit card providers have revised their interest-free balance transfer offers.

“This could perfectly be the perfect time for borrowers who want to consolidate their debt and have more time to pay off their balance without incurring interest. “

Taking control of expensive card debt with a balance transfer and using the 0 percent period to clear or at least reduce your debt could cut costs and show responsible use of credit.

“The terms of 0% introductory balance transfer have lengthened, the fees associated with the transfer have decreased and there is more choice.

“As we head into 2022, consumers would be wise to take the time to compare offers now, especially if they are looking to consolidate their debt.”

However, those who transfer money to one of these cards will have to make sure to pay it back on time or risk facing higher interest rates.

Over the past three months, the average purchasing APR on credit cards has also increased, according to Moneyfacts, with the average APR now 26.2 percent.

For example, over the past three months, Tesco’s credit card customers have seen an increase from 20.9% to 21.9% on its Clubcard Mastercard low-fee balance transfer card.

What are the best balance transfer deals?

For those looking for the longest interest-free period possible, then Virgin Money’s 35-Month Balance Transfer Card for all transfers made within 60 days, making this the longest deal on the market.

However, it comes with a 2.94% fee, which means you may be able to find cheaper options if you’re willing to compromise on the length of the 0% period.

Santander’s daily long-term balance transfer credit card may also be an option.

The card offers an interest-free period of up to 31 months, subject to eligibility, with a balance transfer fee of 2.75%.

A slightly cheaper alternative could be Sainsbury’s Bank’s 30 Month Balance Transfer Credit Card which offers 0 percent interest on balance transfers for up to 30 months subject to eligibility.

The Sainsbury’s Card charges a balance transfer fee of 1.5%, which applies to transfers made on request.

However, the longer term might not be the best option given the fees involved.

Keith Kilcourse, Credit and Loan Editor at Comparison Site, said, “Balance transfer agreements that don’t come with a transfer fee should always be your first port of call.

Most credit card providers now perform a gentle credit research (which has no impact on your credit score) to help you get a feel for what your personalized offer would look like.

“There’s no point in simply going for the longest 0% deal if a slightly shorter deal with no transfer fees would give you enough time to pay off your debt.

“Divide your outstanding balance by the amount you can reasonably afford to pay off each month to get a rough idea of ​​how many months you would need at 0% interest to pay off your debt.”

For those looking for the longest interest-free period with no transfer fees, Sainsbury’s Bank’s 21 Month Balance Transfer Credit Card offers a 0% balance transfer period of up to 21 months with no transfer fees. .

Is a Balance Transfer Card Right for You?

If you are able to erase your debts within a few months, a balance transfer card may not be the best option.

Balance transfer cards rarely come with additional perks like cash back or rewards, for example.

If you’re looking for a credit card that will reward your daily expenses or give you points to put on your next flight, for example, then you might prefer to read our recent roundup of the best credit cards.

However, for those with significant credit card debt, a balance transfer agreement might be a no-brainer.

You can usually transfer up to 90% or 95% of your new card’s credit limit, which will limit the amount of debt you can consolidate, but it could still be worth it anyway.

“If the highest limit you can get is not high enough to cover the transfer, it may still be a good idea to transfer as much as you are allowed to the new, cheaper offer,” Kilcourse explains.

“Next, focus on paying off the remaining costly debt first, while at least making the minimum monthly payment on your new card.

In theory, it’s possible to enter into more than one balance transfer agreement, but getting approved can be a challenge, and multiple credit applications in a short period of time can damage your credit score and be a signal for recovery. alarm for potential future lenders. . ‘

Will you need a good credit score to get one?

Your credit score will likely determine which balance transfer transactions you qualify for.

Without a very good credit score, card issuers can still approve you, but offer a 0% shorter offer.

You may have a bad credit rating and therefore not be eligible for offers from traditional providers.

Kilcourse adds: “There is still some hope for lower credit scores, but beware – after the 0% rate ends, it will get expensive.”

“Those with low credit scores can be approved for interest-free offers of three to nine months. ”

Examples of these include, Vanquis Bank which offers 0 percent for six months and a transfer fee of 2.9 percent and Fluid which offers a term of 9 months and a transfer fee of 4 percent.