The latest research from Fairer Finance, the consumer group and ratings provider, highlights a growing trend of worsening balance transfer deals. The average 0% balance transfer period on credit cards in the UK in mid-2022 was 21 months. This has now been reduced to 17 months.

Furthermore, in October 2022, the longest 0% balance transfer period on offer was 34 months, this has now been reduced to 29 months.

The table below highlights the scale of the reduction of 0% offers since October last year.

In the last year, Sainsbury’s, MBNA, Halifax and Tesco have all reduced their longest offers. In August and September 2023 alone, RBS and NatWest have reduced the longest 0% period they offer from 30 months to 23 months, Barclaycard from 30 to 29 months, Santander from 28 to 26 months, TSB from 27 months to 24 months, and Lloyd's from 24 months to 22 months.

Oliver Crawford from Fairer Finance said: “Lenders may well be cutting 0% periods because they're increasingly worried that borrowers might default, as a result of mounting pressures on their personal finances.

“It's definitely worrying that 0% balance transfer deals are getting worse at a time when interest rates and the cost of living are rising. And we would always encourage borrowers to repay their transferred debt entirely during the 0% period, otherwise they'll face a much higher APR (usually over 20%).”

Fairer Finance is also calling on providers to make it as clear as possible that customers can lose their 0% period entirely if they miss a repayment (where this is the case).

Providers should also do more to explain that 0% balance transfer cards generally aren't suitable for making purchases or cash withdrawals, because that spending will usually accrue interest until the entire balance transfer is cleared.

Oliver Crawford from Fairer Finance continued: “There's certainly more providers can do to inform customers about the benefits and downsides of 0% balances transfer cards, particularly since in light of Consumer Duty requirements, since it isn't always clear when you're applying that you might lose your 0% promotional rate if you miss a repayment, or that these cards often aren't appropriate for spending or cash withdrawals."

Notes to Editors

For further information, please contact:

Karen Mignon, KM Comms: / +44 7766 651327

Louise Ahuja, KM Comms: +44 7788 676913

About Fairer Finance

Fairer Finance is an independent consumer group and ratings provider whose mission is to help create a financial services market which is fair for consumers as well as the companies that serve them. With a heritage spanning almost a decade, Fairer Finance’s unique and impartial Product Ratings are simply designed to help consumers make sense of the complex world of financial products. It rates over 6,000 products spanning over 20 sectors, ranging from bank accounts, credit cards, car insurance and travel insurance.

Its Customer Experience Ratings are designed to help consumers make more informed decisions based on quality and service and not just price (eg trust, complaint-handling, transparency etc).