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Royal Bank of Scotland (RBS) likes to reward its existing customers, and that’s exactly what it has done with its Longer Balance Transfer Card. Exclusive to customers of RBS, the card offers 0% on balance transfers for 22 months and 0% on purchases for 3 months. Just a note, expect to pay a balance transfer fee of 1.99%. But at just under two years interest free, the card gives RBS customers a long runway in which to pay their debt down.
What’s great about this card
Balance transfer offer – The key feature of this card is its long interest-free period for balance transfers. At 23 months, it is up there with some of the other best buy deals available. The card would essentially give you just shy of two years to clear your balance. This makes it a good option for reducing the cost of your debt, as it would help you to avoid costly interest charges.
Purchases offer – While this card is not packed with ‘extras’, it does offer 0% on purchases for three months. While this is not a long period of time, it is something. However, if you are taking out a balance transfer card, it’s a good idea to focus on paying off the balance rather than adding to it.
Instalment plan – As an RBS cardholder, you could also benefit from the bank’s instalment payment plan. This is a mobile app feature that allows credit card customers to set up fixed monthly payments to pay off a balance between £100 and £3,000 over a period of their choosing. The payment plan can also be used on expired 0% balance transfer offers. So if you haven’t paid back your balance by the time your 0% balance transfer offer expires, you could avoid interest and pay a set fee each month instead of by using the installment plan.
Good account management – When you are a customer of a bank like RBS, you can expect a certain level of account management. The bank’s mobile app provides you with an analysis of your spending habits and also allows you to apply for a replacement card. You can even check your credit score for free through the app. And for as many times as you like without it affecting your score.
What’s not so great
Existing customers only – If you don’t hold a current account, savings account, credit card or mortgage with RBS then you are unable to apply for this card.
Balance transfer fee – While you will benefit from a long interest-free period for balance transfers with this card, you’ll still have to pay a balance transfer fee of 1.99%.
Other fees – The card also comes with other fees if you chose to use it abroad. Or if you withdraw cash using your card. It has a cash advance fee of 3%.
How it compares
The RBS Longer Balance Transfer card has a comparatively long balance transfer offer. At 23 months, you could have just under two years to pay off your balance interest-free. Yes, it carries a balance transfer fee, but most cards of this type do. Especially those that have longer interest-free periods. The good news is that the balance transfer fee is just below the market average.
The bank’s instalment plan feature also stands out. It can be used on expired balance transfers offers. So it could give you a little more wiggle room if you haven’t managed to pay off your debt during the interest-free period.
But the fact that the card is only available to existing customers is something to note. If you don’t already bank with RBS then you won’t be eligible to apply.
Why use a balance transfer card?
A balance transfer credit card can be a great way to get yourself out from under high interest charges. If you have an existing balance sat on a regular credit card, you could find yourself struggling to pay the interest
It can also be a good way of consolidating debt. If you transfer all your existing debt to an interest-free balance transfer card, you not only cut the cost of your debt but also give yourself only one monthly repayment to make.
The key to this type of card is to use the interest-free window to pay your debt down at your own pace. In order to really benefit from a card like this, it is best to work out a repayment plan which will result in your balance being completely repaid before the interest-free period comes to an end. At this point, the card will revert to its standard rate, and any remaining balance will start incurring interest charges.
A balance transfer card can help to reduce the cost of your borrowing and can be a handy financial tool if used correctly. Yes, balance transfer cards with the longest interest-free periods tend to carry balance transfer fees. But just try to build this into your calculations of how much money you will save from not paying high-interest charges on other credit cards.
This type of card is not right for everyone and it has to be used correctly in order for you to feel the benefits. However, if you are able to stick to a repayment plan and clear your balance before the end of the interest-free period, you could significantly reduce the cost of your borrowing.
How to apply
In order to apply you will need to log into your RBS digital banking. If you aren’t already registered, you can do so in 5 minutes. You will just need to provide your sort code and account number, and details of your RBS debit card if you have one.
As part of the application you will also be required to provide information about your income, outgoings and employment. The card also has a minimum annual income requirement of £10,000.
Who is this card great for?
This card is great for existing RBS customers who are looking to get out from under high-interest charges on existing credit card balances. Its comparatively long balance transfer offer gives a decent runway in order to pay off debt. And while it does carry a balance transfer fee, it is below average at 1.99%.
It is also best suited to those who have a ‘good/excellent’ credit score and who meet the minimum annual income requirements of £10,000.
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