17th January 2025
As many consumers consider ways to consolidate their borrowing after the festive period, Fairer Finance has analysed the current state of the balance transfer credit card market.
As many consumers consider ways to consolidate their borrowing after the festive period, Fairer Finance has analysed the current state of the balance transfer credit card market. While it has found positive trends for those seeking to manage their debt, the consumer group anticipates that Consumer Duty may soon challenge the sector.
The average number of interest-free days offered on 0% balance transfer credit cards has risen compared to the same period last year, increasing from 488 days in Q1 2024 to 507 days in Q1 2025. The longest 0% balance transfer period is currently available through Barclaycard, which offers a market-leading 31 months, followed closely by HSBC, MBNA, TSB and Tesco Bank at 30 months. This marks a noticeable improvement from the high of 28 months offered by Barclaycard in Q1 2024.
Transfer fees, which typically range between 3% and 3.49%, have remained stable year-on-year, though some providers, such as MBNA, have reduced their fees slightly—from 3.49% to 3.2%—on their longest balance transfer card.
The average representative APR on balance transfer cards has seen a marginal increase, rising from 26.77% in Q1 2024 to 26.91% in Q1 2025. However, the median APR has remained steady at 24.9%, with the maximum APR unchanged at 29.9%.
James Daley, Managing Director of consumer group Fairer Finance, commented: “Longer 0% interest periods provide great value for those who can be confident that they can pay off their debt before the end of the offer period. But the transfer fees that banks are charging do not cover their costs over these extended periods. This means banks are counting on a large number of their customers keeping a balance on the card once the offer is up – at which point the interest rate tends to leap to between 20% and 30% APR. This can turn a good deal into a very bad one within just a few months.
“Consumer Duty raises some challenging questions about the sustainability of these credit card business models. The FCA has made it clear that firms should not rely on income derived from poor customer outcomes. Yet, it’s clear that much of this market continues to do just that. Lenders shouldn’t be surprised if they find themselves facing some difficult questions from the regulator over the year ahead."
Source: Fairer Finance
Consumers should always check the terms of their promotional offer. There are key considerations such as the transfer windows (usually between 60-90 days) and the transfer fee that is offered. Some cards also withdraw the 0% offer if customers don’t make at least the minimum repayment each month. For those seeking to avoid upfront balance transfer fees altogether, there are options like Santander’s Everyday No Balance Transfer Fee credit card, Barclaycard 14 month balance transfer card, and Natwest’s balance transfer card (12 months).
Notes to editors
For further information, please contact:
Karen Mignon, KM Comms: karen@kmcomms.co.uk / +44 7766 651327
Louise Ahuja, KM Comms: louise@louisebcomms.co.uk/ +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).