SAINSBURY'S Bank has unveiled a top balance transfer card with an interest-free period of up to 29 months.
This is the longest balance transfer rate currently on the market, according to data from comparison website Moneyfacts – but there are shorter ones with cheaper fees.
You can apply for the new card on the Sainsbury’s Bank website or phone customer services on 0808 540 5060.
But the actual interest-free period you get will depend on your credit rating and some may be offered 25 or 21 months instead.
There is also a 3% or 4% transfer fee, depending on your individual circumstances.
For example, it would cost £30 to transfer £1,000 of debt based on the 3% fee or £40 if you are charged 4%.
Balance transfer cards: What you need to know
SHIFTING your balance can be a great way to cut the cost of your debt. But you must use them properly so you don’t just add to it.
Always clear your debt – Credit card firms don't offer these deals out of the goodness of their hearts. They rely on you not clearing your balance by the time the 0% deal comes to an end so it can start charging you interest.
Always make your payments – If you don't keep up with your monthly payments, you could lose the 0% offer and start being charged interest. Always try and pay-off more than the minimum payment too to clear your debt quicker and don't spend on the card either.
Check your deal – Like with all credit cards, you might not be offered the headline deal if you don't have the best credit history. Use MoneySavingExpert's eligibility calculator to see what deals you are likely to be accepted for.
Applicants also need a minimum annual income of £10,000 to get accepted for the card.
The card moves to an interest rate of 21.9% at the end of the 29-month period so it's always important to clear the debt in full before the 0% term ends.
If you're unable to pay it all off on time, you could shift it to another 0% balance transfer card beforehand – you can find the best cards of this kind here.
Be warned though that applying for multiple credit cards will hurt your credit score – use an eligibility checker, such as one from MoneySavingExpert, to see what deals you're likely to be accepted for beforehand.
With the Sainsbury's card, there's also a three-month interest-free spending period and you can earn Nectar points on your purchases.
Sainsbury’s Bank will award two points for each full £1 spent at Sainsbury’s, Argos and Tu Clothing in the UK.
There is also an extra Nectar point on offer for each time you spend £5 at Argos eBay stores, Argos Clearance stores, Argos For Business, Argos Spares, Argos Financial Services, Sainsbury’s Bank, Sainsbury’s Energy and any other Sainsbury’s services.
How to cut the cost of your debt
IF you’re in large amounts of debt it can be really worrying.
Here are some tips from Citizens Advice on how you can take action:
Check your bank balance on a regular basis – Knowing your spending patterns is the first step to managing your money.
Work out your budget – By writing down your income and taking away your essential bills such as food and transport. If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs.
Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker.
Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate).
Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them. Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay.
Get a payment holiday – The majority of major credit card companies are offering three-month payment holidays if you're struggling to meet your repayments. You should always keep paying until you've come to an agreement with your provider. Most lenders will also still charge interest during this time, so be aware that these costs will keep building up.
Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further.
- National Debtline – 0808 808 4000
- Step Change – 0800 138 1111
- Citizens Advice – 0808 800 9060
Make sure you don’t miss any of the monthly payments though as the bank will charge you interest of 21.9%.
In contrast, MBNA and TSB offer 28 month balance transfer cards – although their transfer fees are lower at 2.79% and 2.95% respectively.
Sainsbury’s Bank said customers made more than double the number of balance transfers between January and March 2020, up 111% annually as people traditionally take stock of their finances during the new year period.
Jason King, customer director at Sainsbury’s Bank. said: “Following Christmas spending, the new year is usually a popular time for people to take a look at their finances and ensure they’re getting the best deal on their credit cards and other financial products.
"That’s why we are committed to providing our customers with 0% balance transfer deals, along with regular rewards for Nectar customers on their everyday shopping.
“Offering a balance transfer period of up to 29 months, our balance transfer credit card could help make a difference to people’s pockets in the new year.”
You can currently get support on credit card repayments if you are struggling during the pandemic.
It comes as there have been warnings about "unmanageable debt" after shoppers spent £2.3billion on buy now, pay later to help fund Christmas.
See how to get extra help paying the bills if you are struggling to make it to payday.
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