Credit Card News

With the average APR on credit cards standing at 25.0%, credit cards are often a far more expensive way to borrow money compared to personal loans. While credit cards can be expensive, they tend to be popular with consumers as they provide a convenient and easy way to borrow money, especially during times when money is tight.

Although it is never advisable to rack up debts on credit cards – tips on how to clear credit card debt can be found here – they can be a useful way to shop as under section 75 of the Consumer Credit Act they can offer more protection for consumers. As well as this, travel cards that do not charge foreign usage fees can be a cost-effective way to use cards overseas. Meanwhile, regular credit card users could benefit from using a rewards credit card as they allow users to be rewarded as they shop.

Whatever reason for using a credit card, for those who may not be able to repay their balance in full each month, it might be worthwhile to consider choosing a card with a low APR to help keep interest at a more manageable level.

Here we’ve highlighted the lowest APR credit cards available in the 0% purchase, travel and reward credit card charts.

HSBC has launched a new switching offer that will see consumers earn £125 simply by switching their bank account to a HSBC Advance Account or Premier Bank Account. This offer was launched in the same week that Virgin Money revealed a cashback incentive that will see its credit card customers earn up to 15% on everyday spending.

Here we’ve looked at both these incentives in more detail, as well as at some of the alternative switching and cashback offers currently available to consumers.

Credit card borrowers looking to transfer their debt onto an interest-free balance transfer card will be disappointed to find that the number of deals available has fallen year-on-year.

Research carried out by Moneyfacts.co.uk has found that in four years, the number of 0% balance transfer credit card deals has fallen by 66, from 126 available in February 2017 to just 60 available this month. As well as this, compared to a year ago, there are now 18 fewer 0% balance transfer deals available in the credit card charts, as during February 2020 borrowers had 78 deals to choose from.

In addition to the fall in deals available, the average number of interest-free days being offered on deals has also fallen. Four years ago, borrowers could get an average of 669 interest-free days in which to repay their credit card debt, whereas during February this year, the average number of interest-free days is 528.

The year-on-year fall in deals and interest-free terms suggests that borrowers looking to get the best 0% balance transfer deal may want to act soon rather than waiting. “It is hard to tell what attitude to risk credit card lenders will adopt during 2021 in light of the pandemic, and whether this may lead to a further reduction in interest-free balance transfer offers,” explained Rachel Springall, finance expert at Moneyfacts.co.uk. “Consumers looking to take advantage would be wise not to wait around too long and ensure they check their credit score before they apply. They should also be careful to weigh up the length of any deal and its fees, or even search for a shorter interest-free offer without fees instead.”

Whether a new year goal is to clear debts or to make home improvements, many consumers will be looking to take out a personal loan this January to fund their 2021 goal. But research carried out by Moneyfacts.co.uk has found that the average rate on borrowing a small sum of £3,000 has increased year-on-year, so this may not be the best option for consumers looking for the most cost-efficient way to borrow money.

The research has found that the average personal loan rate on sums of £3,000 has increased from 14.6% a year ago to 15.4% today. Saying this, consumers looking to borrow through a personal loan should compare deals on our personal loan chart as there are deals offering much lower rates when borrowing £3,000 over a three-year period.