Happy new balance transfer

Consumer credit awareness, ease of online applications and a change in pass marks suggest more applications may be successful

As we bring in a new year we also welcome a slew of 0% interest balance transfer rates- this trend is clearly not going away. And most surprisingly, two of the best offers are from big retail banks, just as we thought the big four were ceding to retailers and Barclaycard- lest we forget Barclaycard- always pulling out a trump card of one extra month on top of the next best offer.

After RBS and NatWest pulled their balance transfer offerings, crying foul play in that the customer always loses out with such deals, retailers such as Tesco and Sainsbury’s took the mantle, with extended offers of 33 and 31 months interest free. Not forgetting Barclaycard, out-trumping them with a 34 month offer. Now in come Lloyds and Halifax equalling Barclaycard’s 34 month record, only to prompt Barclaycard to up its offer to 35 months. Practically three years. Not to be sniffed at, considering comparable personal loan rates.

From supermarkets to online e-vouchers, there is a trend to slash prices in the hope of drawing in hoards of new customers. Of course, with balance transfers, customers need to be on their guard when the period draws to a close- any remaining balance will be charged at a suddenly sky-rocketed interest rate. But for the sake of securing what effectively can be treated as a very cheap loan (credit-rating dependent, naturally), it is well worth setting an diary reminder for three years down the line to sound a month or two before the period ends so as to shop around for another balance transfer rate onto which to load any remaining balance. The banks bank on the fact that not many customers are this fastidious.

According to Experian, the advent of online applications has meted out the patterns of applications throughout the year. Previously, there would be certain peaks, most notably around Christmas. And while there is still a pre-Christmas swell, the rest of the year is pretty even in terms of applications for credit and hence, lender credit checks.

Credit savvy customers will check eligibility and, if successful, can enjoy almost three years at what amounts to the cost of one year’s APR at a significantly lower rate. What’s not to love. Interest rates may not be quite high enough to bring back stoozing, but in terms of paying off some debt or finding a cheap loan if you opt for one of the lesser available money transfers, you can’t do much better. So why such a divide between banks that do and bank don’t get on this bandwagon? It’s open to suggestion but perhaps it has something to do with the fact that RBS and NatWest both promised to treat their existing customers to just the same exciting offers as their new ones.