Barclaycard's three-year low rate credit card deal to clear debt

By MONEY MAIL

Updated: 06:21 EST, 26 December 2012

Barlcaycard has launched a  credit card allowing borrowers to  pay off debts at a low 4.9 per cent rate for three years.

Its record long-term low interest balance transfer card is targeted at those who want to consolidate other more expensive debts in one place.

Unusually, there is no fee to transfer existing debts, and it also offers 0 per cent on purchases for six months. However, credit card specialists warn the offer benefits only borrowers with excellent credit records.

New Year, new you: The new low rate credit card from Barclaycard is 4.9 per cent for three years.

Michael Ossei, personal finance specialist at comparison site uSwitch, says: ‘It will be available only to those with a squeaky clean credit rating and a minimum income of £20,000.

‘Having stretched the balance transfer period to three years, I wonder just how many of those who apply will be accepted.’

Long-term, low-rate cards can be a canny way for borrowers to bring together other more expensive debts into one place.

This can make them easier to manage, as the repayments leave just one account each month.

However, depending on the type of debts being merged, borrowers can pick up unwanted penalty fees.

For example, to transfer an expensive personal loan to a cheap credit card often involves an early settlement fee, which can eat into the savings. And borrowers need to ensure they can meet the minimum repayment.

In many cases, if you miss a month’s payment, the cheap rate can be withdrawn.

Rivals to the new Barclaycard include MBNA’s Rate For Life card, charging 5.9 p er cent on transferred debt for as long as you have the card.

However, it charges a 1.5 per cent transfer fee and 16.9 per cent on purchases.