Post Office launch new balance transfer card
THE Post Office have added a third credit card to their line up, designed specifically for balance transfers.
The Post Office Money Balance Transfer credit card offers 0% interest for 26 months, with a 0.4% fee.
Outside the promotion, interest is charged at 18.9% APR (variable), and there's also an introductory 0% interest period of three months on purchases.
As mentioned above, this card has been designed specifically for balance transfers. Both of the Post Office's existing cards - reviewed here - offer 0% balance transfers, but this one gives a longer interest free period coupled with a lower fee.
For example, new Matched cardholders must pay a 2.98% fee for just 16 months at the 0% rate; new Platinum card holders can make balance transfers for no fee at all, but will get a maximum of 18 months without interest being charged.
A low or non-existent transfer fee is the latest weapon among credit card providers for trying to woo new customers; with interest free periods of up to three years long becoming more common, they've had to find a new way to stand out from each other.
What seems unusual about the Post Office's balance transfer deals is the way in which they've adopted and adapted this tactic.
They advertise both the Balance Transfer and Platinum cards on the strength of the transfer fee, but make them appear slightly less attractive by pointing out early on that they actually charge a fairly standard fee of 2.98% on the balance being transferred.
This fee is then refunded within 90 days of the balance being moved across, so customers only pay the amount they saw advertised.
It's simple enough to see how that works with the Platinum card - the whole fee is refunded.
With the Balance Transfer card, people will get back an amount equivalent to a fee of 2.58% of their transferred balance.
Say, for example, we transfer £2,000 to the card. At the time we make the transfer we'll be charged a fee of 2.98%, which is £59.60.
As the 0.4% fee is just £8, we should find that at some point within the next 90 days we'll be refunded £51.60.
The middle ground
Although it's more complicated than it needs to be, this low transfer fee makes this one of the better cards out there for the length of the interest free period available.
As we've already said, it's increasingly common to find 0% deals for three years or more - have a look at our comparison table here to see what we mean - but they tend to come with transfer fees of at least 2.45%.
The fees for cards offering between 24 and 35 months interest free range from 0.8% to 3% - all higher than the Post Office Balance Transfer card, and not necessarily for as long a time.
But before racing to sign up, there are other things to be aware of.
Balance transfer cards really shouldn't be used for anything but balance transfers - but that doesn't stop card providers from throwing in features that might tempt us to do so.
In the case of this card, those features include 0% interest on purchases for the first three months of having the card, and - like the other two cards issued by the Post Office - there's no cash fee for buying foreign currency at the Post Office's bureaux de change.
But that doesn't mean they're free. In fact, the interest charged on them is 27.9%, as with the Post Office's other two cards.
The standard interest rate is 18.9% APR (variable); at least 51% of applicants will get this rate, but others may be offered rates of 21.9% or 24.9%.
In the same vein, not everyone will get the full 26-month interest free period - those who don't will be offered a 0% period for 18 or 22 months instead.