Could this be the last big January balance transfer bonanza as lenders slash interest-free terms by up to 35%?

 For Immediate Release

  • £6 billion switched in month of January alone in the last 4 years (Jan 2015 to Jan 2018 inc)
  • Total of 2.64 million balance transfer transactions in January in the last four years
  • Two years ago, the longest 0% balance transfer (BT) deals were 43 months now only two lenders offer more than 30 months
  • Customers urged to apply with caution and check their credit score first

 

Alastair Douglas, CEO of TotallyMoney, the credit experts, comments on the dwindling choice of long-term balance transfers as we approach the biggest month of the year for credit card debt switching.

“January has always been the bumper month for balance transfers, with many consumers re-jigging their finances as part of their New Year resolutions – but the best 0% terms are disappearing fast.”

“Last January was the busiest in 12 years with £1.63 billion switched in 31 days – it will be interesting to see if the trend continues next month.

“At the start of 2017 there were 10 major credit card providers offering 0% interest terms of 40 months or more, now the market has slumped and there are just two lenders with deals over 30 months (MBNA and Post Office).

“It seems that providers are falling out of love with ultra-long zero per cent cards and if the trend continues over the next 12 months, some consumers will become increasingly anxious if there’s no longer a healthy stream of 0% offers to help them plug the hole in their finances.

“TotallyMoney urges customers not to rush in and make panic applications and risk damaging their credit score. By signing up for a Free Credit Report users will be able to check their Borrowing Power and eligibility to find out which cards they have the most choice of being accepted for.”

 

Credit card balance transfer activity for the month of January
Month Value of balance transfers £ billion Number of balance transfers
January 2015 £1.34bn 592,000
January 2016 £1.43bn 631,000
January 2017 £1.60bn 711,000
January 2018 £1.63bn 705,000
Total £6.00bn 2,639,000
Source: UK Finance

 

Alastair added: “Interest-free credit deals won’t be around for ever, so we encourage people to make the most of them while they are still around – if you can clear your debt within the promotional term it’s a smart and cost-effective way of managing your money.”

 

Card Provider Longest 0% BT deal at 1st Feb 2017 Longest 0% BT deal at 17th Dec 2018
MBNA 43 months 33 months – down 23%
Halifax 43 months 28 months – down 35%
Nuba (MBNA) 42 months Brand scrapped for new customers
Barclaycard 42 months 29 months – down 31%
Sainsbury’s Bank 42 months 30 months – down 28%
Lloyds Bank 42 months 28 months – down 33%
Virgin Money 41 months 29 months – down 29%
Santander 41 months 30 months – down 27%
AA Cards 41 months Cards not available for new customers
Tesco Bank 40 months 28 months – down 30%
Research Moneycomms.co.uk 17.12.2018

 

Andrew Hagger, Personal Finance Expert from Moneycomms said: “Some card customers use interest-free balance transfers as a smart way to save money, but for others it’s a way to keep their heads above water as they try to juggle increasing levels of personal debt and to stop their bank account going into the red”.

If you’re serious about shifting debt and getting your finances back on track, getting a copy of your Free Credit Report is essential as it’s the foundation to all your borrowing, whether it’s your plastic or a mortgage application.”

 

For more information, please contact James McCaffrey

About TotallyMoney

TotallyMoney has been championing fairer and better consumer credit since 2007 by helping customers make smart borrowing decisions. We won Best Free Credit Report Provider in the 2018 Moneynet Personal Finance Awards and since its launch in 2017 our Free Credit Report has already put more than one million customers in control of their credit data.