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"Are 0% balance transfer deals disappearing?"

By admin | December 8th, 2008 | Balance Transfers

Over the past few years millions of credit card users throughout the UK have managed to save a fortune in interest by transferring their high interest credit card balances onto 0% balance transfer credit cards. These 0% credit cards have offered an extended interest free period within which the consumer can pay off the combination of transferred balances without being charged any further interest on the debt, thus saving some people a significant sum of money.

At this time of year, with Christmas fast approaching, these cards tend to be very popular, as many people decide after the expense of the festive season, with much of the spending being put on plastic, to transfer their balances on to 0% balance transfer cards and save money on the amount of interest that they have to pay. However, whilst this has become common practice over recent years this year it may not be quite as easy for those planning to do this.

The reason behind this is two-fold. Firstly, the dreaded global credit crunch has had a profound impact on all financial sectors, and with lenders unwilling to take changes on those with less than perfect credit many people may find that they are no longer able to get a 0% balance transfer credit card, even thought they may have managed to get one last year before the global financial crisis really took a hold. However, it is not just tighter credit conditions that are going to affect consumers’ success when it comes to getting a 0% balance transfer credit card.

According to one recent report the number of 0% balance transfer credit card deals on the market is starting to fade, and this means that with fewer 0% balance transfer cards available consumers are going to find it more difficult to find a suitable and affordable deal. The report claims that a year ago there were around 82% of credit card providers that offered 0% balance transfer cards, but this has now fallen to 75%. Consumers could choose from one hundred and three of these cards a year ago, but can now only choose from the eighty seven remaining on the market.

One industry expert said: ‘These figures should send a clear message to borrowers that the credit card merry-go-round is grinding to a halt. In the coming months, it’s going to become increasingly difficult to refinance your debt at 0% interest. This trend away from extended balance transfer periods underlies a shift in the industry which is increasingly cautious about the people it lends to and is far more interested in the profitability of its customers. A year ago there were dozens of cards with overall APRs of little more than 10%, but today the most competitive cards offer rates of 16% or more.’

Tags: 0% balance transfers

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