The competition for balance transfer credit card customers has intensified today after the Royal Bank of Scotland (RBS) and NatWest unveiled new 23-month interest-free credit card offer.
Both RBS and NatWest have launched new balance transfer cards that will enable them to join Barclaycard and HSBC at the top of the best-buy tables for the length of the interest-free period, though Barclaycard still trumps the new products with a lower balance transfer fee of 2.8 per cent.
RBS’s card charges a fee of 3.5 per cent on the balance transferred and HSBC charges 3.3 per cent.
MBNA also joined the party today with the launch of a 14-month interest-free offer on its balance transfer credit card. Although the zero-interest period is not as long, the fee is MBNA’s lowest ever at just 1.25 per cent.
RBS’s Platinum Extended Balance Transfer Card also offers six months interest-free on purchases and has an interest rate of 17.9 per cent.
However, the new card may not be available to everyone as the bank’s last balance transfer card required applicants to have a spotless credit record and it is likely that the same conditions will apply.
Michael Ossei, personal finance expert at uSwitch.com, says: “Competition in the credit card market is fierce and it’s good to see NatWest and RBS now going into battle with Barclaycard, which currently tops the tables with its 23-month 0% balance transfer card.
“These 0% balance transfer cards can save borrowers hundreds of pounds in interest, but consumers must be aware of the fees. The NatWest and RBS card carries a 3.5% fee, compared to Barclaycard’s 2.8% - this means transferring a typical £5,000 balance to the NatWest and RBS card will cost £175, as opposed to £140 with Barclaycard.
“However, as always the devil lies in the detail. A market-leading product is only beneficial to consumers if they can actually get their hands on it. NatWest’s previous 22-month balance transfer card proved extremely elusive for those without a squeaky clean credit rating.”