10:06 01 April 2013
It might not be the longest 0% term on the market, but the card offers other bonuses that you may consider more important.
Here, we take closer look at the pros and cons of the Tesco card, as well as how it stands up to its closest competitor, Barclaycard - which has since retaliated by upping the 0% period on its Extended Balance Transfer card to a best-ever 26 months (you can read more about this deal in Les Roberts' article).
What's the deal?
The Tesco Clubcard Credit Card for Balance Transfers now offers 25 months at 0% for new customers who move debts to the card, as well as a 0% on purchases offer lasting three months.
The card previously offered 23 months at 0% on balance transfers, but a longer six months at 0% on purchases.
Will Curley, credit card director at Tesco Bank, said: "Increasing our balance transfer offer reflects our ambition to consistently provide good value products that reward our customers' loyalty."
Other benefits of the Tesco card include access to the Clubcard reward scheme, with card-holders receiving one point for every £4 spent outside Tesco stores, and five points for every £4 spent in stores.
The 25-month, 0% deal is subject to a balance transfer fee of 2.9%.
Who's it good for?
First and foremost, anyone who already carries debt on a Barclaycard, as you will not be able to transfer this to a card from the same provider.
In other words, the market-leading Barclaycard with Extended Balance Transfer offering 26 months at 0%, won't be available to you, making the Tesco offering an attractive alternative.
But, independent of this, Tesco's deal is also a great choice for regular shoppers at the store who are looking to boost their Clubcard point earnings - which can then be used to offset the spiralling cost of food shopping.
For example, if you were relying just on the Tesco Clubcard loyalty card to collect points, you would receive only one point for every £1 spent in store.
But, with the Tesco Clubcard Credit Card for Balance Transfers, you will be able to collect this - plus another point on top for every £4 spent (that's five points for each £4). In addition, you can earn points on spend outside the store at a rate of one for every £4.
Lastly, Tesco's generous 25-month balance transfer deal will obviously appeal to people with debt to transfer as it will mean avoiding interest for more than two years.
And the larger the debt, the more sense it makes to take the Tesco credit card over the Barclaycard. This is because Tesco charges a fee of 2.9% compared to Barclaycard's 3.5% for its 26-month balance transfer offer. So, to switch across £2,000 to Barclaycard will cost £70, compared to £58 with the Tesco card.
While Tesco's 2.9% fee is lower than its closest competitor, it's still a cost consideration.
So, for anyone who can pay their debts off in less than 25 months, a card offering a shorter 0% period and charging a lower fee may prove a better bet.
Cards worth a look include the NatWest Platinum Low Balance Transfer Fee Credit Card offering 0% for 13 months with a 1% fee and the Lloyds TSB Platinum MasterCard offering 0% for 21 months with a 1.5% fee.
The cards both come with a representative APR of 17.9% (variable).
What's the verdict?
This new deal from Tesco is certainly competitive. As well as on the fee, it also beats Barclaycard's Platinum Credit Card with Extended Balance Transfer on its representative APR. Tesco charges 16.9% ,whereas Barclaycard charges a representative 18.9% (both APRs are variable).
For true 0% purchases, Tesco also now only offers three months, compared to its previous six. Barclaycard, however, offers a six-month window to repay purchases at 0%.
But remember, if the purpose of taking a balance transfer card is to clear expensive existing card debt (average APRs stand at a crippling 17.32%), putting new spending on the plastic is unwise.
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