Tesco Balance Transfer Credit Card

By: Peter Stephens | Updated: 16th August, 2019.

Great for: Long 0% balance transfer period
5 stars question mark

Tesco’s Balance Transfer Card gives successful applicants 28 months of 0% interest on balance transfers. That’s very near the longest on the market. There is a balance-transfer fee to be paid (2.98%), but that’s typical of 0% offers of this length. The card also offers 28 months 0% on money transfers (3.94% fee) and Tesco Clubcard points, making it a very well-rounded offer.

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CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • 28 months 0% interest on balances transferred in the first 90 days
  • 28 months 0% interest on money transfers made in the first 90 days
  • 1 Tesco Clubcard point for every £4 spent at Tesco
  • 1 Tesco Clubcard point for every £8 spent elsewhere
  • No annual fee

REPRESENTATIVE EXAMPLE

Representative rate 19.9% APR (variable)
Purchase rate 19.9% p.a. (variable)
Based on borrowing £1,200

what we like

  • 28 months 0% interest on balances transferred in the first 90 days
  • 28 months 0% interest on money transfers made in the first 90 days
  • Collect Tesco Clubcard points on all spend
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    19.9%
  • INTRO OFFER:

    0% interest for 28 months on balance and money transfers in the first 90 days

KEY SCORES:

  • 4/5 Perks
  • 3/5Fees
  • 4/5APR

HIGHLIGHTS

  • 28 months 0% interest on balances transferred in the first 90 days
  • 28 months 0% interest on money transfers made in the first 90 days
  • 1 Tesco Clubcard point for every £4 spent at Tesco
  • 1 Tesco Clubcard point for every £8 spent elsewhere
  • No annual fee

REPRESENTATIVE EXAMPLE

Representative rate 19.9% APR (variable)
Purchase rate 19.9% p.a. (variable)
Based on borrowing £1,200

OUR BOTTOM LINE

If you are looking for a balance transfer credit card with a generous 0% interest period that also offers rewards, the Tesco Balance Transfer Credit Card could be appealing. It has a 28-month balance transfer period, during which time a 0% interest rate is applicable.

It also has a money transfer offer, while Tesco Clubcard points could make it more appealing as an everyday credit card. Although there are transfer fees and foreign exchange fees, the card stacks up relatively well when compared to rival offerings.

Credit Rating Requirement: Good/Excellent

What I like

  • Balance transfer – The card’s balance transfer offer allows consumers with existing credit card debt to reduce the amount of interest they pay. It has a 28-month balance transfer period, during which time an interest rate of 0% is charged on transferred debt. Up to 95% of your credit limit can be transferred within 90 days of account opening.
  • Lower interest payments – The amount of interest saved by transferring an existing balance to the card will depend on the current rate of interest being paid. For example, a £2,500 debt with an interest rate of 18.9% and payments of £150 per month could be paid off three months early, with £310 in interest saved during the process. The interest saving includes the balance transfer fee of 2.98%.
  • Rewards – Tesco Clubcard points are accumulated on its Balance Transfer Credit Card. For every £4 spent on the card at Tesco, one Clubcard point is earned. When the card is used at retailers other than Tesco, one Clubcard point is collected for every £8 spent. Clubcard points can be used to pay for a variety of experiences, including in restaurants, and can even be trebled to boost their monetary value at a number of destinations.
  • Money transfer – The card offers a 0% interest rate on money transfers for a period of 28 months. This could make it appealing to consumers who have non credit card debt such as a personal loan. Although there is a 3.94% fee applicable to money transfers, the total savings on offer could still be significant. For example, for a personal loan of £5,000 at an interest rate of 7.5% that has payments of £200 per month, it could lead to an interest saving of £240 (including the money transfer fee), as well as the debt being repaid three months early.

Why trust me

I have been writing for The Motley Fool since 2013, and have experienced the booms and busts of the UK economy for a number of decades both as an investor and a consumer. I have held various senior management positions during my career, while also setting up my own manufacturing company in 1996. It was subsequently sold in 2007. I have a keen interest in consumer finance, as well as in the stock market.

What could be improved

  • Transfer fees – Although the card’s balance transfer and money transfer offers could save consumers with existing debt significant sums of money, the fees could reduce overall savings. This may be particularly relevant for consumers who have relatively modest existing debts or who intend to repay them over a short period. In such situations, consumers may be better off searching for a card that has lower, or even no, balance transfer or money transfer fees.
  • Foreign transaction fees – While the Tesco Balance Transfer Credit Card could be used as a primary credit card, its non-sterling transaction fee of 2.75% means that it may be worthwhile having an additional travel credit card. This could reduce the cost of trips abroad, since foreign transaction fees can add up to large amounts over the long run.

How does it stack up?

The 28-month balance transfer period offered by the card is long. Although it may be possible to find a somewhat more generous period from other balance transfer credit cards, you’re unlikely to find a significantly longer 0% interest period.

The money transfer offer is also attractive in terms of its length, and could make the card more appealing versus its peers. Likewise, the rewards that are on offer from the Tesco Balance Transfer Credit Card help it to stand out versus peers, and may mean that it is useful as a primary credit card for many consumers.

While the card’s balance transfer, money transfer and foreign exchange fees may reduce its appeal, they are comparative to those of other balance transfer credit cards. Although it may be possible to find credit cards with lower fees, their 0% interest periods for balance transfers and money transfers may be shorter as a result. The card’s lack of an annual fee may make it more appealing than other balance transfer cards.

Credit score

Before applying for the Tesco Balance Transfer Credit Card, it is worth double-checking that you meet the eligibility criteria. These include having a good credit history, having an annual income of at least £5,000 and not holding more than one other Tesco credit card.

The advertised interest rates and balance transfer period are representative. This means that they must be offered to the majority of successful applicants, with the remainder potentially receiving different terms. Therefore, it may be the case that you receive a shorter balance transfer period, for example, than the 28 months advertised.

How to apply

Applications for the credit card can be made online. A decision as to whether an application has been successful is usually available within 10 minutes.

Various details will be required when applying for the card. They include your previous address history, details of your employment, as well as information on current balances on other credit cards or personal loan information should you be seeking to take advantage of the balance transfer or money transfer offers respectively.

Is the Tesco Balance Transfer Credit Card right for you?

If you are looking for a balance transfer or money transfer credit card with a long 0% interest rate period relative to those of many other cards, the Tesco Balance Transfer Credit Card could be a good option. The fact that the card offers Tesco Clubcard points increases its appeal and could make it a worthwhile credit card to use every day as opposed to just using it for the 0% interest rate period on balance transfers and money transfers.

As with many balance transfer credit cards that have long 0% interest periods, fees apply to debt that is transferred onto the card. The foreign transaction fee is also fairly standard across non-travel credit cards. However, the card is still relatively appealing despite its various fees. It could help to reduce your interest costs on existing debt, while providing rewards for everyday spending without charging an annual fee.

See the Best Balance Transfer Credit Cards


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