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

Dec 27th 2018

** 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

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TotallyMoney is on a mission to improve the UK's credit score, with their free credit report at the heart of this goal. Today, TotallyMoney is the highest rated free credit report provider on Trustpilot, and has over two million customers (and growing!). They've also won Best Free Credit Report Provider at Moneynet's Personal Finance Awards every year since their launch in 2017.