Virgin Money has launched a new balance transfer card, offering a 29-month 0% interest-free period. So how does the card work? And how does it compare with other balance transfer options? Let’s take a look.
How does a balance transfer card work?
If you pay interest on credit card debt, getting a 0% balance transfer credit card can reduce the interest you pay to zero. That’s because the new balance transfer card pays off the debt on your old card for you, so you owe the new card instead. As the new card offers a 0% period, you won’t have to pay any interest for the duration of the 0% deal.
Typically, the longer the 0% period, the higher the fee to shift your debt. Sometimes there are fee-free options too, though these typically come with short 0% periods.
How does the Virgin balance transfer card compare?
The new Virgin Money balance transfer card offers a 0% period of 29 months. That’s the joint-longest 0% deal on the market.
Anything you shift to the card within the first 60 days, will incur a 2.7% fee. For example, if you have £2,000 credit card debt and you shift it to the Virgin card within 60 days, you’ll be charged £54. However, as long as you clear the card within 29 months, you won’t pay any interest on your balance.
This can save you a lot, especially if you are paying nearly 40% interest on a typical credit card.
What else should I know about the Virgin deal?
With Virgin’s new card, it’s best to transfer any debt to the card sooner rather than later. That’s because the 2.7% balance transfer fee applies to the first 60 days only. Anything you shift after this will incur a higher 5% fee.
The card also has a three-month 0% spending period. However, as part of the card’s terms, you must stay within your credit limit to keep the 0% deal. While three months of 0% spending is not bad, if you are looking for a card to spend on, you can get far longer 0% periods with a 0% purchase credit card.
As with any 0% balance transfer card, it’s important to note that a 0% period doesn’t mean you have nothing to pay. You must make at least the minimum payment in order to keep the interest-free deal.
However, it’s often a far better idea to make set monthly payments. This is because you can be sure that you’ll clear your balance before the end of the 0% period. If you don’t, you’ll have to pay 21.9% representative APR interest.
What other balance transfer options are there?
Sainsbury’s Bank also offers a balance transfer card with a 29-month interest-free period. The fee to transfer your debt is 2%.
However, this 0% length is an ‘up to,’ so those with poorer credit scores may be offered a shorter 21-month 0% period or a higher fee of 3%. With the Virgin card, if your application is accepted, you’ll definitely get the full 29-months 0% period.
Alternatively, if you’re confident you can clear your debts sooner, Virgin Money has another balance transfer card offering a 27-month 0% period. While this is two months less than the market-leading deals, it comes with a lower 1.2% fee to transfer your debt, so it could be a cheaper option. The card has a representative APR of 21.9%.
What about no-fee cards?
While no-fee balance transfer options aren’t as abundant as they used to be, there is one option available. However, you must be an ‘existing customer’ of NatWest, RBS, or Ulster Bank to access it. To be considered an existing customer, you must have a current account, savings account, credit card or mortgage with any of the above banks.
As an existing customer, you can apply for a balance transfer card offering 18 months at 0% with no fee. The card has a representative APR of 21.9%.
To learn more about balance transfer cards, and to see a list of other cards available, see our top-rated 0% balance transfer cards.
Will I have to undergo a credit check?
When applying for any credit card, you will undergo a hard credit search. This will be recorded on your file for a year or so. If you can, it’s best to minimise the number of applications you make in order to protect your score.
To help, you can use our credit card eligibility checker to assess your chances of being accepted before applying.
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