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Cost of borrowing falls in credit card market

Cost of borrowing falls in credit card market

Category: Credit cards

Updated: 23/03/2015
First Published: 20/03/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Do you have a credit card, or are you thinking of getting one? If so, it could be a great time to go about it – research from Moneyfacts has revealed that the cost of borrowing is continuing to fall across the market, with the longest 0% interest deals ever recorded!

More competition = longer terms…

The figures show that both the introductory balance transfer and purchase terms reached new highs in the last three months, with competition fuelling these increases as providers vie to attract borrowers. In the introductory purchase sector, the average 0% deal has risen by nine days from December, to stand at a new record of 260 days.

The average balance transfer term, meanwhile, has increased by a considerable 20 days over the same period, reaching a new high of 491 days. In fact, the longest deals on the market offer 0% interest on balance transfers for a full 36 months! Barclaycard was the first to offer such a deal, a move that served to boost competition in the sector and encourage other providers to follow suit, including Virgin Money, who launched a rival 36-month deal not long after.

… and lower fees

In even better news, as well as having longer 0% interest terms to enjoy, the average balance transfer fee is falling! The average fee now stands at just 2.36% after enjoying a drop of 0.08% over the last three months, meaning it's now even cheaper to take advantage of some great deals. It gives you the chance to lower your cost of borrowing from every angle, so if you're thinking about your credit commitments, it could be time to consider making the switch.

Stop paying interest!

As the figures show, if you're paying interest on your credit cards, it's time to stop! There's no need to stick with a deal that charges extortionate rates of interest – if you're serious about clearing your debt then consider switching the amount to a balance transfer credit card, or if you need to make a big purchase or two, opt for a 0% purchase card to spread the cost without interest adding to the bill. Check out the top deals to find out what's on offer, and see if you can benefit from the falling cost of credit…

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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.