In this article we look at the best balance transfer and purchase credit card deals available at the moment. We compare the interest-free introductory periods on offer, the fees and perks on a range of cards in this category, as well as helping you decide whether a balance transfer and purchase credit card is a good option for you.
What is a balance transfer and purchase credit card?
As the name suggests, a balance transfer and purchase credit card - also known as an "all-round" credit card - combines introductory offers on both balance transfers and purchases. On some cards the length of the interest-free period will be the same for both balance transfers and purchases, while for others they will be different. It's important to have a clear idea of what the offer is on the card you apply for as this will enable you to manage your use of the card and avoid having to pay a higher APR when the introductory period comes to an end.
When you are comparing cards, it is a good idea to look at the other features of the card in addition to the headline introductory offers on balance transfers and purchases. There are often additional offers on money transfers and some cards also provide perks such as rewards and cashback. It is also vitally important to consider how much the card will cost after the initial offer period has come to an end, as well as the details of the balance transfer and purchases components, including:
- How long do you have to transfer a balance after taking out the card?
- Is there a balance transfer fee?
- Are there any limits on the credit or store cards you can transfer money from? Often you won't be able to transfer debt from cards from the same main provider - details should be provided in the summary box for the card on the provider's website.
- What is the credit limit?
- Are there any restrictions on the time period you can make purchases within and still qualify for the interest-free offer?
Why should I get a balance transfer and purchase credit card?
A balance transfer and purchase credit card is a good option for someone who is looking to simplify their finances. It means that, rather than having to manage two cards, you only have to focus on making the payments and managing the spending on one. And, while it used to be the case that you could get much better deals by taking out separate cards for balance transfers and purchases, growing competition means there are some excellent deals available for these multipurpose, all-round cards.
Choosing to apply for one all-round card can also be better for your credit file as it can have a negative impact on your credit rating across the main credit reference agencies if you apply for several different cards at the same time. In addition, if you do have problems keeping up with repayments later down the line, it will mean you only have one credit card company to communicate with to try to secure extra help.
How does a balance transfer and purchase credit card work?
A balance transfer and purchase credit card allows you to transfer an existing balance from another credit or store card and also have the opportunity to undertake further spending, with the additional purchases also attracting no interest for a specified period. In most cases you will need to transfer the balance within a certain number of days after being accepted for the card - typically between 30-90 days. As we have previously mentioned, there may be a handling fee payable on the balance you are transferring, which can be anything up to 5% of the total amount.
It is worth noting the introductory period starts from the moment you are accepted for the card rather than when you action a balance transfer or make your first purchase. You will also need to make sure you keep up with the monthly repayments on the debt, even during the interest-free period, as you are likely to be liable for a late fee and, in some cases, can forego the introductory offer altogether if you miss a payment.
When the introductory period comes to an end, any remaining debt will then attract interest, including future purchases. At this point, some people opt to find another card with an interest-free offer and transfer the remaining balance again. However, it can be detrimental to your credit file to frequently take out new cards. Moreover, any credit scoring by a lender can be negatively impacted if you close an unused card and significantly increase the percentage amount of your available credit being used. For more information on this, read our article "Will cancelling an unused credit card affect my credit score?"
Is a balance transfer and purchase credit card a good way to tackle debt?
If you have a significant amount of debt and you are struggling to keep up with the repayments, particularly if you are paying a high APR, taking out a balance transfer and purchase card could be a good idea. It gives you breathing space to sort out your finances, using the money you are saving on interest payments to pay off more of the core debt. However, with the facility to also make other purchases with no interest payable during the initial period, it can be tempting to increase your total debt, especially if you have months - or even years - to pay it all off before you have to start paying interest on the card. The danger is clear: unless you use the card responsibly, you could end up in a worst position financially by taking it out.
The best way to use a balance transfer and purchase card to tackle debt is as part of a strategy. This could include:
- Committing to paying more than the minimum repayment every month - By paying as much as you can afford now, you will reduce the overall debt - and hopefully clear it altogether - before the end of the introductory period.
- Limit any additional spending on the card - While the interest-free period on purchases will have been part of the attraction of the card in the first place, use it for the specific purchases you had in mind when taking out the card and keep all future spending after that to a minimum.
- Work out a budget - If you plan to use the card for day-to-day spending, for example if it offers cashback or rewards, determine in advance how much you are going to spend and commit to paying it off in full each month
- Work out how much you need to pay off each month to be able to clear the total debt - It can be useful at the outset to have a month-by-month breakdown of how much you need to pay off to be debt-free at the end of the introductory period. You can incorporate this into one of the many budgeting apps that are now available. Find our recommendations for the best budgeting apps here.
If you are experiencing problems with managing your debt, you can find details of sources of help in our article "Where to get free debt advice".
Compare the best balance transfer and purchase credit cards - March 2021
Top 5 balance transfer and purchase credit cards in March 2021
|Card||Balance transfer offer||Purchases offer||Balance transfer fee||Representative APR (after introductory period)|
|Santander All in One||26 months||26 months||No fee||21.7% variable|
|Virgin All Round||20 months||20 months||2.90%||21.9% variable|
|Sainsbury's Dual Offer||Up to 20 months||Up to 20 months||3%||21.9% variable|
|Capital One Classic Complete||Up to 6 months||Up to 4 months||3%||34.9% variable|
Longest interest-free period balance transfer and purchase credit card
- Best for: Those looking for the longest interest-free periods, no balance transfer fees and cashback
- Representative APR: 21.7% APR variable
- Interest-free period on balance transfers: Up to 26 months (no balance transfer fee)
- Interest-free period on purchases: Up to 26 months
- Perks: Card holders get 0.5% cashback on all spending. They can also sign up to Santander's free Retailer Offers scheme, which gives up to 15% cashback from a range of major retailers
- Annual fee: £36
For a full review, see our article "Santander All in One credit card review".
Best for guaranteed interest-free periods
- Best for: Those looking for certainty they will get the full introductory period if accepted for the card
- Representative APR: 21.9% APR variable
- Interest-free period on balance transfers: 20 months (2.9% balance transfer fee)
- Interest-free period on purchases: 20 months
- Perks: Holiday and travel offers, 20% off Virgin Experience Days, 30% off Virgin Balloon flights, 40% off Virgin wines
- Annual fee: No annual fee
For a full review, see our article "Virgin All Round credit card review".
Best for rewards
- Best for: Those who regularly shop at Sainsbury's
- Representative APR: 21.9% variable
- Interest-free period on balance transfers: Up to 20 months (3% balance transfer fee)
- Interest-free period on purchases: Up to 20 months
- Perks: 750 bonus Nectar points each time you spend £35 or more on a Sainsbury's shop, up to 10 times in the first two months. Then collect up to 3 points for every £1 spent at Sainsbury's, Argos and Tu Clothing and 1 point for every £5 spent elsewhere
- Annual fee: No annual fee
For a full review, see our article "Sainsbury's Dual Offer credit card review".
Best for those with bad credit
- Best for: Those with an average credit score. You are unlikely to be accepted if you have a heavily impaired credit history
- Representative APR: 34.9% variable
- Interest-free period on balance transfers: 6 months (3% balance transfer fee)
- Interest-free period on purchases: 4 months
- Perks: No additional perks
- Annual fee: No annual fee
For other options for those with poor credit, see our article "Compare the best credit cards if you have bad credit".
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