CREDIT CARDS
Interest Free Credit Cards Sweep the Market
Recent analysis of the 0% balance transfer credit cards on the market reveals there are currently a record 54 offering interest free periods of 12 months or more.
The research by Moneynet shows the average term of a 0% deal is also at a new high of 12.16 months, up from 9.87 months a year ago, Andrew Hagger said.
It was suggested that the Consumer Credit Directive which came into effect on 1st February 2011 has enabled providers to offer these competitive deals as it means they can be selective to who they offer the deals to.
The Directive enables lenders to offer the best deals to 51 percent of successful applicants compared to the previous requirement of 66 percent.
There is currently £58.2 billion outstanding on credit cards, the Bank of England revealed in March this year, meaning card providers have numerous opportunities to pick up business from struggling consumers.
These 0% deals also enable providers to generate free advertising exposure via best buy tables.
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Consumers with heavy debts however are being warned to pay off their balances as soon as they can, to avoid the high interest rates many of these promotional offers revert back to after the promotional period expires.
Also, if consumers miss a monthly repayment they could see their interest free offer terminated after only one fault, so those seeking a 0% deal are urged to tread carefully.
The Barclaycard Platinum 20 months balance transfer deal is still the longest offer on the high street, followed by MBNA, Virgin Money, Bank of Scotland and NatWest who all offer deals of 18 months.
The Virgin Credit Card offers customers a 0% interest free period of 18 months and a 0% interest free period of three months, with 16.8% variable representative APR.
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