A balance transfer is when you transfer the money owed on one credit card or store card to another credit card and the new lender pays off the debt for you. You then pay the new lender back, usually at a lower rate.

In recent times a balance transfer credit card war has exploded, with many providers offering 40 month, 41 month and even 42-months 0% interest on balance transfers, allowing customers a much longer period to pay off the debt.

Often there’s a balance transfer fee or handling fee attached to a balance transfer, expressed as a percentage of the total amount transferred and it’s this fee, according to data site Moneyfacts, which could mean long interest-free deals may not be as cost-effective as they originally may seem.

For example, a balance transfer credit card that comes with a 4% balance transfer fee means when you move over £1,000, your new balance would be £1,040.

But not all balance transfer cards apply the fee and research from Moneyfacts reveals there are seven fee-free interest-free balance transfer cards offering a term of two or more years.

These are available from the following lenders: Bank of Scotland, Barclaycard, Halifax, Lloyds Bank, Sainsbury’s Bank, Tesco Bank and Virgin Money.

Further, there are currently 16 fee-free cards on the market offering interest-free periods of between one and 29 months:

Rachel Springall, finance expert at Moneyfacts, said: “It would be wrong to assume that the longest interest-free balance transfer cards on the market are the best for every borrower, as this entirely depends on how much debt a consumer has and how long they are prepared to have it hanging over their heads.

“Just because borrowers can apply for a 42-month interest-free balance transfer card, that doesn’t mean it’s the best choice for their circumstances. A borrower with a £4,000 debt could be charged as much as £131.60 to transfer to such a card. If they can afford to repay around £170 every month over two years, they could apply for a fee-free and interest-free balance transfer card instead.

“A handful of these fee-free and interest-free balance transfer cards offer interest-free periods of two years or more, which can be so useful for borrowers looking to save themselves from any unnecessary fees when switching debt. Consumers may be moving their debt from one card to another to gain a bit more time to repay the balance, but if they’re not careful this could cost them dearly in fees every time they switch on most cards.”

According to data from the TUC, household debt is expected to rise to a record high next year which means some consumers could be relying on their credit card for certain expenses. Springall said this means a number of borrowers sitting on interest-free deals might not be able to repay their debt before their deal ends.