Credit cards Updated:
Credit card providers are seeing their profits being hit by rate tarts and rising bad debts. They are suffering from offering attractive 0% balance transfer deals aimed at increasing their market share. Because people are become wiser to switching credit cards for a better deal, providers are losing out.
This has led to credit card providers launching lifetime balance transfer deals. This means the rate is applied until the balance transferred has been paid off. This can be beneficial if you are not the type of person who wants to keep changing cards after an introductory offer on balance transfers ends.
Many providers still offer 0% deals on balance transfers for certain periods, usually nine to twelve months. However, credit card providers are increasingly adding fees for transferring balances to these credit cards. These fees are typically 2%, with a maximum of £50. A recent moneyfacts.co.uk user poll revealed that 91% of people would not choose a credit card that charges a fee to transfer a balance to it.
A lot of lifetime balance transfer credit cards do not charge these fees. The APRs for the lifetime balance transfer deals are not as low as other balance transfer credit cards but are lower than standard rates. Someone with a £2,000 balance to transfer from a card with an APR of 15% could save over £120 a year if making minimum monthly repayments.
According to a moneyfacts.co.uk user poll, 55% of people do not pay off their credit card balance in full each month. This means many of us have outstanding balances on our credit cards for which we may be paying an uncompetitive rate of interest. This can cost hundreds of pounds.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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