Borrowers hoping to cheaply combine their debts on one credit card could struggle to find a provider
Borrowers hoping to cheaply combine their debts on one credit card could struggle to find a provider.
The number of credit card deals offering interest-free balance transfers has tumbled to a record low of 54.
The fall, from 76 at the start of the year, will hit customers particularly hard as the UK endures its first recession in 11 years.
Fall: The number of credit card deals offering interest-free balance transfers has tumbled to a record low of 54
Job losses and salary cuts caused by the Covid-19 pandemic have spurred several borrowers into trying to pay off their credit cards, and savvy customers will be looking to consolidate their debts interest-free.
But Rachel Springall, finance expert at Moneyfacts, said borrowers ‘would be wise to consider a new deal soon, as the market is contracting’.
She added: ‘The number of offers available to consumers has dropped since the start of 2020 and the fall echoes that seen during the past recession.
‘Typically, credit card providers would rein in lucrative offers during a period of economic uncertainty so that they are not taking on too much risk.
‘As experienced during the recession between 2007 and 2009, credit card providers pulled interest-free balance transfer cards and, since the start of January, the market has already felt a similar contraction thanks to the impact of the coronavirus pandemic.’
She also warned borrowers hoping to swtich to be wary of balance transfer fees.
‘Since the start of 2020, the average balance transfer fee has crept up from 2.27 per cent to 2.32 per cent,’ she said.