Will a credit card balance transfer work for you?

The battle between credit card companies vying to offer the longest 0 per cent term for balance transfers shows no sign of tailing off, with the launch of yet another high-profile deal.

The latest 34-month 0% credit card from HSBC keeps the pressure on Barclaycard, Tesco Bank, MBNA, Lloyds, Halifax and Sainsbury's in the fight for "best buy" status.

If you are financially disciplined, there are some good savings to be made, but the potential costs of these cards can be high if they aren't managed properly.

The problem, and something the card providers rely on, is that many people fall off the 0 per cent wagon mid-term and end up incurring significant interest charges.

Long interest-free deals aren't easy to get hold of either, notwithstanding the competitive zeal of the lenders. You will need a near-perfect credit record to qualify for the best deals, and if you don't meet the criteria, you may be offered a shorter 0 per cent term, possibly a higher interest rate and a fairly small credit limit. You may even have your application declined.

If you are accepted for one of these products, make sure you don't exceed your limit or miss a monthly payment, as the lenders will then have a handy get-out clause to terminate the introductory promotional deal on the spot.

Another tip is not simply to opt for the card with the longest interest-free period unless you intend on using it for the full term. It's not uncommon for customers to switch to 0 per cent and then switch away again or to repay the balance well before expiry, so for many people the balance-transfer fee is also a key consideration if they want to keep costs down.

The one-off fee is much cheaper if you opt for a term that is slightly shorter than the table-topping cards. For example, the transfer fee on TSB's 15-month 0 per cent card is currently just 0.8 per cent, well below the 3.30 per cent charged by HSBC on its new 34-month card.

If you're confident you can pay off your credit card bill over a much shorter period, perhaps from an annual bonus, then the Tesco Bank Clubcard offers one-year interest free with no balance-transfer fee.

Certainly there are plenty of fresh debts piling up on credit cards – something that was highlighted in research from Yorkshire building society this week. Its survey found that a fifth of festive shoppers have been relying on credit to fund some of their Christmas shopping, with the average spend this year estimated to be £487.

The most worrying revelations were that one in 10 people admitted to putting all their Christmas expense on plastic, and almost a third said they would spend their entire disposable income for December on the festive period alone.

When you see the Black Friday consumer scramble for wide-screen televisions and the latest "must have" gadgets – and hear stories that delivery companies are struggling to keep up with orders placed with the online shopping giants – you have to fear that the new year credit card bills will land with an almighty thud come mid-January.

I can picture the stories now as the Black Friday excesses come home to roost on what will be known as Blue Monday – the middle of January when the bank balance is at rock bottom and the bills just keep coming.

It looks as if 2015 will be another year where JoePublic lines the pockets of the credit card giants. Hopefully I'm wrong but the signs don't look promising.

Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.uk