Research carried out by financial information group Moneyfacts shows that the number of balance transfer cards has increased significantly in the last two years.
Balance transfer credit cards allow balances from previous credit cards to be transferred to a new card while the interest payments are frozen for the 0% duration. There is a small transfer fee involved (usually around 3% of the balance transferred), but in almost all cases this is a much cheaper option.
This rise in products has been seen across most of the other credit card types, from 0% on purchases, that allow consumers to pay for goods upfront and pay them off over several months without paying interest for the privilege, to bad credit cards, designed to help those that have been declined credit in the past due to a lack of credit history, or a damaged credit score.
As more and more providers have continued to enter the market, competition has been steadily rising. Last year, Barclaycard began an aggressive campaign that would see it break the record of the longest 0% balance transfer duration on several occasions.
In December 2010, the provider pushed the interest free period on its Platinum card to the longest ever duration, at 17 months. This was followed closely by the next move in February, when it increased the duration again to 18 months. On the day that two of its main rivals finally responded to match the 18 month deal, Barclaycard surprised everyone by pushing the 0% period to 20 months.
Barclaycard then launched another balance transfer card in April, offering 18 months 0% with a slightly lower transfer fee and a lower APR, which was later increased to 19 months.
Michelle Slade of Moneyfacts said: Competition has returned to the credit card market in the last year.
Card providers are going head to head in order to lure customers from their competition.
Customers with 3,000 on a card, just repaying the minimum would accrue 764 in interest charges over 20 months, she added.
The number credit cards offering 0% balance transfer deals for 13 months or more has rise by a massive 162% over the last two years.
There are currently three balance transfer cards that come with a 17 months interest free, five cards at 18 months, three at 19 months and one with 20 months.
The golden rule with any credit card is to always pay off at least the minimum monthly balance, and to avoid paying any interest ensure your balance is cleared in full within the interest free period.
Balance transfer credit cards allow balances from previous credit cards to be transferred to a new card while the interest payments are frozen for the 0% duration. There is a small transfer fee involved (usually around 3% of the balance transferred), but in almost all cases this is a much cheaper option.
This rise in products has been seen across most of the other credit card types, from 0% on purchases, that allow consumers to pay for goods upfront and pay them off over several months without paying interest for the privilege, to bad credit cards, designed to help those that have been declined credit in the past due to a lack of credit history, or a damaged credit score.
As more and more providers have continued to enter the market, competition has been steadily rising. Last year, Barclaycard began an aggressive campaign that would see it break the record of the longest 0% balance transfer duration on several occasions.
In December 2010, the provider pushed the interest free period on its Platinum card to the longest ever duration, at 17 months. This was followed closely by the next move in February, when it increased the duration again to 18 months. On the day that two of its main rivals finally responded to match the 18 month deal, Barclaycard surprised everyone by pushing the 0% period to 20 months.
Barclaycard then launched another balance transfer card in April, offering 18 months 0% with a slightly lower transfer fee and a lower APR, which was later increased to 19 months.
Michelle Slade of Moneyfacts said: Competition has returned to the credit card market in the last year.
Card providers are going head to head in order to lure customers from their competition.
Customers with 3,000 on a card, just repaying the minimum would accrue 764 in interest charges over 20 months, she added.
The number credit cards offering 0% balance transfer deals for 13 months or more has rise by a massive 162% over the last two years.
There are currently three balance transfer cards that come with a 17 months interest free, five cards at 18 months, three at 19 months and one with 20 months.
The golden rule with any credit card is to always pay off at least the minimum monthly balance, and to avoid paying any interest ensure your balance is cleared in full within the interest free period.
SHARE
