Shoppers planning to spread the cost of Christmas by transferring their credit card balance to a 0% transfer credit card will be disappointed by the latest research showing that the average interest-free term on these cards has fallen to its lowest level in five years.
The research, due to be published in the Moneyfacts UK Unsecured Lending Trends Report, found that on the 1 December 2020, the average number of interest-free days on a 0% transfer credit card was 520 days, the lowest level since May 2015, when the number of average interest-free days was 518. This compares to a year ago, when on the 1 December 2019 the average interest-free term on 0% transfer credit cards was 536.
In addition to the average interest-free term falling, the number of 0% transfer credit cards available to consumers has also fallen year-on-year. On 1 December 2019, there were 75 0% transfer credit cards available in our charts, whereas on the 1 December 2020 the number of deals had fallen to 60. “Consumers looking to take advantage of an interest-free balance transfer offer will find less choice compared to 2019, at a time when some may well be looking to consolidate their debts for a bit of breathing space moving into the New Year,” explained Rachel Springall, finance expert at Moneyfacts.co.uk. “Providers have clearly been cautious with their offerings, not only due to the impact of the Coronavirus pandemic, but also other influences on the market over recent years, such as the crackdown on continuous credit card debt by the Financial Conduct Authority.”