Credit cards Updated:
The number of balance transfer cards has soared in the last two years, research by Moneyfacts.co.uk has revealed.
The market has exploded in recent times, and consumers can now get up to 20 months in which to pay down their balances at a rate of 0%.
With providers battling for a slice of the credit card market, the number of balance transfer credit cards offering interest free periods of 13 months or more has risen by 162% in the last two years.
Two years ago, there were 13 0% balance transfer credit cards on the market with the highest term being 16 months.
The number jumped to 22 in June 2010, although the highest term remained at 16 months.
As many providers have launched new 0% cards over the last 12 months, the number of products currently available has risen to 34, with an increasing number of deals available above the 16 month mark.
There are now three cards at 17 months, five cards at 18 months, three cards at 19 months and one card at 20 months.
The likes of Barclaycard, Nationwide, MBNA Europe Bank, Virgin Money and Royal Bank of Scotland have all launched cards with terms in excess of 17 months at 0% over recent months.
"Competition has returned to the credit card market in the last year," commented Michelle Slade, spokesperson for Moneyfacts.co.uk.
"Card providers are going head to head in order to lure customers from their competition.
"Customers with £3,000 on a card, just repaying the minimum would accrue £764 in interest charges over 20 months.
"By transferring to an interest free deal, customers could put this money towards reducing their debt.
"Customers opting for a balance transfer card should refrain from spending on the card as this will limit the benefit of the interest free deal.
"If customers need longer to repay a debt or don't want to keep switching, a small number of cards offer low rates for the life of the balance.
"The best is from MBNA Europe Bank, whose Rate for Life Visa charges just 5.9% APR until the balance is cleared.
"While there are an increased number of deals on the market, card providers remain risk adverse and only customers with exemplary credit rating are likely to be accepted."
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 Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.