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Introductory interest-free credit card offers dwindle

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
06/11/2023

Introductory interest-free credit card offers dwindle

Over the past month, several introductory interest-free offers have been slashed. The latest analysis by Moneyfactscompare.co.uk highlights the movement in the market and the current top offers for consumers looking for a new deal.

Introductory interest-free credit card offers dwindle

Over the past month, several introductory interest-free offers have been slashed. The latest analysis by Moneyfactscompare.co.uk highlights the movement in the market and the current top offers for consumers looking for a new deal.

  • Since the start of October 2023, Barclaycard, Virgin Money, MBNA and Halifax have reduced either their 0% introductory purchase or balance transfer offers*.
  • Over the past 12 months, the length of the top interest-free terms has shortened. The top 0% purchase offer in November 2022 offered 24 months interest-free compared to 21 months today. The top 0% balance transfer offer in November 2022 offered 34 months interest-free compared to 29 months today.
  • The average purchase APR on a credit card stands at its highest point on Moneyfacts’ electronic records of 34.5% APR (since records began in June 2006), so borrowers should be wary when using their existing card to cover the festive spend.

 

  • Since the start of October 2023, Barclaycard, Virgin Money, MBNA and Halifax have reduced either their 0% introductory purchase or balance transfer offers*.
  • Over the past 12 months, the length of the top interest-free terms has shortened. The top 0% purchase offer in November 2022 offered 24 months interest-free compared to 21 months today. The top 0% balance transfer offer in November 2022 offered 34 months interest-free compared to 29 months today.
  • The average purchase APR on a credit card stands at its highest point on Moneyfacts’ electronic records of 34.5% APR (since records began in June 2006), so borrowers should be wary when using their existing card to cover the festive spend.

 

 

Longest introductory 0% balance transfer credit card (BT fee)

Longest introductory 0% purchase credit card

Nov-18

M&S Bank – 0% for 32 months (0.99%)

Sainsbury's Bank Dual Offer Credit Card Mastercard – 0% for 29 months

Nov-21

Santander – 0% for 31 months (2.75%)

Tesco Bank Clubcard Credit Card Purchases Mastercard – 0% for 23 months

Nov-22

Sainsbury's Bank – 0% for 34 months (2.88%)

Sainsbury's Bank Dual 24 Month Offer Credit Card Mastercard – 0% for 24 months

Jun-23

Virgin Money – 0% for 31 months (3.50%)

NatWest Purchase & Balance Transfer Credit Card Mastercard – 0% for 23 months

Oct-23

Barclaycard – 0% for 29 months (3.45%)

Barclaycard Platinum All-Rounder Visa – 0% for 22 months

Today

Barclaycard – 0% for 29 months (3.45%)

Barclaycard Platinum All-Rounder Visa – 0% for 21 months

Cards included do not charge a monthly card fee. Source: Moneyfactscompare.co.uk

 

 

Longest introductory 0% balance transfer credit card (BT fee)

Longest introductory 0% purchase credit card

Nov-18

M&S Bank – 0% for 32 months (0.99%)

Sainsbury's Bank Dual Offer Credit Card Mastercard – 0% for 29 months

Nov-21

Santander – 0% for 31 months (2.75%)

Tesco Bank Clubcard Credit Card Purchases Mastercard – 0% for 23 months

Nov-22

Sainsbury's Bank – 0% for 34 months (2.88%)

Sainsbury's Bank Dual 24 Month Offer Credit Card Mastercard – 0% for 24 months

Jun-23

Virgin Money – 0% for 31 months (3.50%)

NatWest Purchase & Balance Transfer Credit Card Mastercard – 0% for 23 months

Oct-23

Barclaycard – 0% for 29 months (3.45%)

Barclaycard Platinum All-Rounder Visa – 0% for 22 months

Today

Barclaycard – 0% for 29 months (3.45%)

Barclaycard Platinum All-Rounder Visa – 0% for 21 months

Cards included do not charge a monthly card fee. Source: Moneyfactscompare.co.uk

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Shoppers considering an interest-free credit card to spread the cost of their purchases would be wise to review the latest offers in the run-up to Black Friday and Cyber Monday this month, as some of the lengthiest 0% offers have been slashed. The top 0% introductory purchase credit card currently offers shoppers almost two years to pay back their debt, which could be a lifeline for those worried about covering the cost of Christmas this year.

“There are only a couple of weeks to go until Black Friday and Cyber Monday, but many retailers have already started tantalising consumers with offers. According to American Express, 41% of shoppers indicated deals and offers would influence their decision to spend more on gifts for family and friends. Covering a rise in any spending may be difficult for some households, especially as they continue to face a cost of living crisis. A credit card should never be used in excess to cover the cost of Christmas, but they can be useful as a short-term method if borrowers stick to a repayment plan to not leave any debts hanging overhead for long.

“Some of the longest interest-free balance transfer offers carry higher transfer fees, but there are still some fee-free offers for borrowers to consider instead. Those borrowers who do not have an interest-free offer on their current deal must be concerned that interest rates within the credit card market have risen, indeed the average purchase rate stands at a record high of 34.5% APR. If someone borrowed £1,000 on a credit card that charges 34.5%, but made £100 in fixed repayments, it would cost them around £165 in interest and take a year to repay. However, if they stuck to repaying £50 per month, it would take twice as long to repay and cost around £400 in interest**.”

*Since the start of October 2023: Barclaycard reduced its 21-month introductory interest-free purchase transfer offer to 20 months and its 27-month balance transfer offer to 20 months, with another card reducing its 19-month balance transfer offer to 18 months. Halifax reduced its introductory interest-free 25-month balance transfer offer to 23 months. MBNA Limited reduced its introductory interest-free 19-month balance transfer offer to 18 months. Virgin Money reduced its introductory interest-free 25-month balance transfer offer to 24 months.

**Based on a £1,000 borrowing on a credit card charging 34.5% APR, with a minimum repayment of 2.5% or £5 whichever the greater. Difference in interest based on fixed repayments of £100 or £50.

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Shoppers considering an interest-free credit card to spread the cost of their purchases would be wise to review the latest offers in the run-up to Black Friday and Cyber Monday this month, as some of the lengthiest 0% offers have been slashed. The top 0% introductory purchase credit card currently offers shoppers almost two years to pay back their debt, which could be a lifeline for those worried about covering the cost of Christmas this year.

“There are only a couple of weeks to go until Black Friday and Cyber Monday, but many retailers have already started tantalising consumers with offers. According to American Express, 41% of shoppers indicated deals and offers would influence their decision to spend more on gifts for family and friends. Covering a rise in any spending may be difficult for some households, especially as they continue to face a cost of living crisis. A credit card should never be used in excess to cover the cost of Christmas, but they can be useful as a short-term method if borrowers stick to a repayment plan to not leave any debts hanging overhead for long.

“Some of the longest interest-free balance transfer offers carry higher transfer fees, but there are still some fee-free offers for borrowers to consider instead. Those borrowers who do not have an interest-free offer on their current deal must be concerned that interest rates within the credit card market have risen, indeed the average purchase rate stands at a record high of 34.5% APR. If someone borrowed £1,000 on a credit card that charges 34.5%, but made £100 in fixed repayments, it would cost them around £165 in interest and take a year to repay. However, if they stuck to repaying £50 per month, it would take twice as long to repay and cost around £400 in interest**.”

*Since the start of October 2023: Barclaycard reduced its 21-month introductory interest-free purchase transfer offer to 20 months and its 27-month balance transfer offer to 20 months, with another card reducing its 19-month balance transfer offer to 18 months. Halifax reduced its introductory interest-free 25-month balance transfer offer to 23 months. MBNA Limited reduced its introductory interest-free 19-month balance transfer offer to 18 months. Virgin Money reduced its introductory interest-free 25-month balance transfer offer to 24 months.

**Based on a £1,000 borrowing on a credit card charging 34.5% APR, with a minimum repayment of 2.5% or £5 whichever the greater. Difference in interest based on fixed repayments of £100 or £50.

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Contact Us If you're looking for extra comment, a chart or more information, then please give us a call. We are always more than happy to help.
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant