The recently published Moneyfacts UK Credit Card Trends Treasury Report has revealed that the number of credit card deals with an introductory term on purchases or balance transfers now sits at its lowest level since 2010. This means that those looking to make purchases or transfer credit card debt now have less choice, and should therefore think extra carefully before they apply for a new card.
"The introductory credit card market has seen the number of 0% deals in the market fall for another consecutive quarter," commented Charlotte Nelson, finance expert at Moneyfacts. It's especially disappointing, given that data earlier this month showed that the length of interest-free balance transfer credit card terms has reduced.
Indeed, the Treasury Report shows that the average balance transfer term has decreased by 42 days since its peak in February 2017, to end up at 627 days this month. This means that borrowers have lost more than a month on their introductory term, as well as 26 deals, in the space of a year.
|Number of 0% purchase deals||102||96||88|
|Number of 0% balance transfer deals||123||117||97|
Source: Moneyfacts Treasury Reports
Charlotte suggests that the Bank of England's recently raised concerns about excess lending and overstretched borrowers "was the trigger that initially started the reduction in interest-free deals rolling. The addition of the Financial Conduct Authority's new rules tackling persistent debts has seen the number of deals drop even further."
No provider wants to get on the bad side of the Bank of England, let alone the Financial Conduct Authority, so it's only natural that they have been getting rid of some deals, especially those that stand out due to long introductory terms. While this may prevent some people from being too tempted by credit card deals, those borrowers that use their credit cards wisely will surely be disappointed.
As Charlotte says, however, "it's not all doom and gloom. There are still 0% introductory offers available, albeit for a shorter length of time." To find the best of these, you could have a look at our Best Buy charts for 0% interest balance transfer or purchase credit cards, or if you want a bit of both, there are 0% interest cards to consider.
Charlotte does warn people interested in these deals that they "should always aim to pay off the balance in full before the interest-free deal ends, to ensure no interest is charged." If you're one of those people the Bank of England is worried about, and you're finding it hard to get rid of credit card debt, consider this guide for some steps to take.
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.