Credit Card News

Consumers looking to prepare their finances for what could be a tough winter economically, will be disappointed to see that many banks have been cutting their 0% balance transfers credit card deals.

A 0% balance transfer credit card is often a good option for those looking to consolidate or move interest-bearing credit card debt to an interest-free card, making it easier and cheaper to repay the debt. But our research has found that since July the average interest-free period on 0% balance transfer cards has fallen by 33 days, down from 553 days at the start of July to 520 days today.

“Credit card providers are tightening their 0% introductory balance transfer offers, and over the past three months over a dozen cards have seen their terms slashed,” explained Rachel Springall, finance expert at Moneyfacts,co.uk. “This movement could well be attributed to the continued economic uncertainty surrounding the Coronavirus pandemic and the subsequent impact on how much risk providers are willing to take and how consumers may be situated financially.

Summer may only just be over but from today there are just 100 day left until Christmas and according to research from American Express, 32% of consumers have already started their Christmas shopping.

Christmas can be an expensive time of year, so it may make sense to spread the cost over several months by starting the festive shop early. This year will be particularly difficult for many consumers and, according to American Express, 28% of consumers are planning to spend less on Christmas this year compared to the previous year.

Ideally, those who like to splash out during the festive season should have a Christmas savings fund to help them with the cost. But, for those who have had to use their savings to help with essential costs during the year or who haven’t managed to save as much as they like, a 0% purchase credit card can be a helpful way of spreading the cost of Christmas.

It should always be remembered that money spent on credit cards is borrowed money and, as such, those using credit cards should keep their spending within affordability limits and ensure they have a plan in place and the means to pay off the credit card as quickly as possible. 0% purchase credit cards can be a useful option in the run up to Christmas, as they do not charge interest on purchases made on the card during a pre-set time period.

Below we’ve highlighted some of the best deals within the 0% purchase credit card charts.

The start of September will have many thinking about how to manage their finances as payment holidays on overdrafts, mortgages and credit cards will soon come to end. The economic climate looks turbulent for the remainder of 2020 with increased job losses highly likely as the Government furlough scheme wraps up at the end of October.
Households wanting to reduce their monthly outgoings could save money by reviewing any current borrowing and switching this to a new product with a lower rate of interest. Our research shows that those with £3,000 on a credit card charging 18.9% APR could save £292 in a single year by switching to a fee-free 0% balance transfer card. Those using a £500 overdraft could save £49.20 by switching to a bank account with a lower rate of overdraft interest.

Consumers looking to transfer debt to an interest-free balance transfer card are being urged to act quickly, as new research shows that lenders have withdrawn 22 deals since the start of the year.

Research carried out by Moneyfacts.co.uk found that the number of interest-free balance transfer cards currently stands at a record low of just 54 deals – a fall of 22 since the start of 2020 when there were 76 deals available.

It is not unusual to see lenders pull attractive deals from the market during recessions, for example during the last recession, a similar number of deals (21) were withdrawn from the market – falling from 118 available at the start of December 2007 to 97 available at the start of June 2009. This means that borrowers looking to get the best deals available should act quickly or they may risk missing out on the most lucrative offers. As Rachel Springall, finance expert at Moneyfacts.co.uk, explained: “The number of offers available to consumers has dropped since the start of 2020 and the fall echoes that seen during the past recession.

“Typically, credit card providers would rein in lucrative offers during a period of economic uncertainty so that they are not taking on too much risk. As experienced during the recession between 2007 and 2009, credit card providers pulled interest-free balance transfer cards and, since the start of January, the market has already felt a similar contraction thanks to the impact of the Coronavirus pandemic.”