Who's offering the best rate?

The latest figures from the British Bankers' Association show that unsecured lending to consumers rose at a record rate during February and that credit card, overdraft and loan borrowing by individuals increased by ?1.1bn last month.

The group put the surge down to financially savvy consumers making the most of low introductory interest rate offers on credit cards to transfer their balances and make their debt cheaper to manage.

Most credit card companies offer a low debt transfer rate as an incentive to attract customers. These often carry an annual percentage rate (APR) of less than 3%, and in some cases charge no interest at all.

However, these debt transfer rates are almost always only for a limited period, usually six months, and then revert to the lender's standard rate, which can often be five times as much as this transfer rate. In addition, it is worth bearing in mind that the transfer rate only applies to the debt which you have transferred onto the new card, so any additional debt you build up will be charged at the lenders' standard rate.

The big four high-street banks tend to charge the highest interest rates, with Barclays, the world's most popular credit cards, leading the way with a rate of 18.9%. Even Barclays' transfer rate is relatively high, at an APR of 6.9%, not exactly providing an incentive for those shopping around for a good deal.

So which lenders are offering the best transfer rate?

0%

Egg and Halifax are both offering balance transfer rates of 0%. Egg's rate applies until September 1 and Halifax's rate applies for the first five months from the date of transfer. This rate is only applicable on its classic Mastercard/Visa and not on its Flat Rate card or Cashback card.

Egg's standard rate is 12.9% while Halifax's is 17.9%.

While Egg offers a good rate, unfortunately users of the card have not always had good experiences, with money disappearing from accounts only to reappear later, as well as slow response times to problems.

2% and below

The RBS Advanta card has a transfer rate of 1% until January next year, which then reverts to the bank's standard 15.9%. Tesco has a balance transfer rate of 1.5% until October 1, which then reverts to 14.9%.

Abbey National and Lloyds TSB both do a balance transfer rate of 1.9%. Abbey's offer reverts to 14.9% after six months while Lloyds TSB's Asset Advance card charges 11.9% after the same time period. Confusingly, if you take out Lloyds TSB's standard Asset Card you'll end up paying 17.9% after the transfer period.

Other lenders, such as Liverpool Victoria, Lombard Direct and First Direct, also offer balance transfer rates below 4%. Alternatively, you could go with Intelligent Finance or Cahoot who have APRs of 8.9% and 8% respectively, fixed whether you transfer or are an existing customer.

It's only worth checking the balance transfer rate of a card if you have a hefty balance on an existing card with a high interest rate. If you are looking at running up a sizeable bill for the first time on a credit card look at the introductory rate instead, which also usually applies for six months, as well as the standard rate it reverts to.

All the latest rates can be found at www.informationchannel.