New customers who apply for a Barclaycard online or over the phone will get a 0% balance-transfer rate that runs until September next year — the longest interest-free period for balance transfers. But they will be charged a fee of 2% up to a maximum of £35 on any balance switched from another card.
The amount you can transfer will also be capped at 90% of your credit limit up to a maximum of £5,000.
No other credit-card firm charges new customers for making a balance transfer.
The interest-free period for new purchases runs for only three months. Customers then pay the standard rate, which depends on a credit score. The typical rate is 15.2%, but it could be as high as 26.3%.
Stuart Glendinning at Moneysupermarket, a financial website, said: “The new card is not as good as the previous offer — and the 2% charge for balance transfers will not be welcomed by consumers.
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“The balance-transfer rate, which runs for about a year, appears attractive. However, if you factor in the fee and the £5,000 limit it is no longer a clear market leader.”
You can avoid the transfer fee if you apply for the card at a branch. These applicants do not, however, benefit from the three-month interest-free period on purchases.
Mike Naylor at the Consumers’ Association said: “It is confusing for customers to offer two versions of the deal. I am not aware of any other credit-card firm that varies the terms and conditions according to how you apply for the card.”
Barclaycard denies its new deals are confusing. The firm said: “It is not unusual to have different offers running through different channels. We are not trying to catch people out. We are completely upfront about the 2% fee on the online and telephone offer and it is clearly displayed in all our literature.”
If you apply for the new Barclaycard to take advantage of the balance-transfer offer, do not be tempted to spend on the card.
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Barclaycard’s payment hierarchy means you clear the cheapest debt first.
Even if you get the version with the 0% new-purchase offer, unless you clear the entire balance within the first three months, your new- purchase balance will not be paid off until all of the money you transferred has been repaid. In the meantime, you will be accruing interest.
The best deal for new purchases is currently from Sainsbury’s Bank. Customers will be charged no interest for the first 12 months. They will, however, accrue interest at 5.9% on balance transfers.
The best option for balance transfers and new purchases is the Halifax One card.
It offers a nine-month interest-free period on both types of debt.