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Get one of the best balance transfer credit cards on the market.

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If you're looking for a new balance transfer credit card, you may be finding it difficult to separate the wheat from the chaff. Here's my guide to choosing the BT card that's right for you.

0% cards: The basics

What's so great about a 0% balance transfer card?

Well, if you've got credit card debts which you are paying interest on, by moving those debts to a 0% card, you will pay zero interest, instead.

This will enable you to pay off your debt much more quickly, as 100% of your payments will go towards clearing your debt, and nothing will go to the card provider.

Certain 0% cards also allow you to make 'money transfers' to pay off non-card debts - like personal loans or overdrafts - as well.

Just bear in mind that all 0% balance transfer credit cards are only interest-free for a short period of time (at the moment, no longer than 16 months).

Other balance transfer cards offer very low rates of interest for longer periods of around three years.

And a few offer the 'lifetime' balance transfer option: A relatively low rate of interest for as long as it takes you to clear your transferred balance.

It's usually a bad idea to use BT cards for new spending. The vast majority operate negative payment hierarchy, which means your new spending will be racking up interest until you've cleared the rest of your balance.

For the purposes of this article, I'm going to assume your balance transfer card won't be used for spending. If you do need to spend on a credit card (and you're unable to clear the balance every month), have a look at your 0% new purchase card options instead.

So - what are the best balance transfer cards in each category? And which sort is right for you?

0% interest on balance transfers

First, let's look at the cards offering 0% on balance transfers. Here are my top picks:

The Virgin Money card offers the longest 0% BT deal on the market, lasting 16 months.

I've had it myself for the past year, and I know it can work as a very cheap way to clear your debts.

However, it's not whiter-than-white: If you take your eye off the ball for a second, Virgin has a host of tricks up its sleeve to get interest and other charges out of you. Read Is this really the best credit card on the market? to find out more.

For length of 0% deal, the Abbey and Egg cards come in second and third place.

With all these cards, remember that a 0% balance transfer isn't a free loan: all charge fees of between 2.5% and 3% of the balance that's being transferred.

If you use one of these cards cannily (and clear your balance during the 0% promotional period), the hefty 'typical APR' shouldn't be relevant to you. Don't leave it too late and end up paying 16.9%!

But what if you don't think you can clear your balance in 16 months?

Good middle ground

Onto the balance transfer cards that offer a low rate of interest for a longer, set period of time. In this category, there's one new card I particularly like: The Barclaycard Platinum Credit Card with Long Term Balance Transfer.

This card offers a very low, fixed rate of 6.3% for three years on balance transfers up to £5,000. And unlike most balance transfer cards, you WON'T have to pay any transfer fee.

It also has a relatively low typical APR of 12.4%. However, to make the most of the deal, you really need to clear your balance in the first three years, and never end up paying this higher rate.

I think this is a good, low-interest compromise option for people who need a bit more time to clear their balance. The offer is open to new Barclaycard customers only, and (as with most BT cards) you'll need a good credit rating to be accepted for the deal.

However - what if you want longer to clear your debts?

Lifetime alternatives

Onto the cards that offer you a low rate for as long as it takes you to clear your balance. Here are my top picks:

Each of these cards is good in different ways. The Barclaycard Simplicity Visa offers by far the lowest rate - just 6.8%.

On the downside, however, this rate is variable - so it could theoretically change at any time. And this card does charge a transfer fee of 2.5%.

The Halifax Easy Rate MasterCard doesn't charge a transfer fee - but again, the rate is variable, and over 2% higher than the Barclaycard option.

Finally, the Capital One Fixed Rate MasterCard is good in that is does offer a fixed rate until 1st August 2012 - offering you peace of mind for over three years. Its APR is the highest of the three, at 9.9% - but that said, it doesn't charge a transfer fee.

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