Rachel Springall, Finance Expert at Moneyfacts, said:
“The cost of making a purchase using a credit card outside of an introductory 0% offer has reached a record high due to a combination of changes during Q3 2021. A selection of low-rate credit cards worsened, some higher-than-average rate cards were launched, and other lower-than-average rate cards were withdrawn. In June, NatWest, RBS and Ulster Bank increased their 9.9% APR purchase rates to 12.9% and TSB increased its own from 7.9% APR to 9.9% APR. As it stands, there are only now cards available from Lloyds Banking Group, Tesco Bank and TSB that charge a purchase rate of 9.9% APR within the entire credit cards market.
“Shoppers who decide to spread the cost of their spend on a credit card and apply for a 0% purchase offer will find deals have improved over the past quarter, with the most notable lengthening of terms to 20, 21 and 22 months interest-free. In August, Tesco Bank increased its 0% purchase term from 20 months to a market-leading term of 22 months on its Clubcard Credit Card Purchases Mastercard and Barclaycard raised its 20-month 0% introductory purchase offer to 21 months on its Platinum All-Rounder Visa.
“Borrowers moving their debts to an interest-free balance transfer will find a handful of providers lengthening offers this quarter to 26, 27 and 29 months respectively.
One market-leading offer to increase from a 28-month deal to 29 months is the Sainsbury’s Bank Balance Transfer Credit Card Mastercard which charges a lower fee than its peers of 2.00%. There were several balance transfer fee reductions over the past quarter, the most significant was last month from TSB which fell from 2.95% to 1.45% on its Classic Credit Card Mastercard. Clearly, credit card providers are reviewing not just 0% terms but also the upfront cost to adjust their overall appeal to entice new business. We may well see more tweaks in the months to come as we head towards the festive season and some consumers may already be debating how to spread the cost.
“As interest purchase rates increase and 0% offers fluctuate, it's important consumers stay on top of the changing market and switch where appropriate. Those struggling financially in the aftermath of the UK lockdown would be wise to seek debt advice, check their credit report before applying for a credit card, and keep in mind that they may not always be granted the top deal advertised.”
Rachel Springall, Finance Expert at Moneyfacts, said:
“The cost of making a purchase using a credit card outside of an introductory 0% offer has reached a record high due to a combination of changes during Q3 2021. A selection of low-rate credit cards worsened, some higher-than-average rate cards were launched, and other lower-than-average rate cards were withdrawn. In June, NatWest, RBS and Ulster Bank increased their 9.9% APR purchase rates to 12.9% and TSB increased its own from 7.9% APR to 9.9% APR. As it stands, there are only now cards available from Lloyds Banking Group, Tesco Bank and TSB that charge a purchase rate of 9.9% APR within the entire credit cards market.
“Shoppers who decide to spread the cost of their spend on a credit card and apply for a 0% purchase offer will find deals have improved over the past quarter, with the most notable lengthening of terms to 20, 21 and 22 months interest-free. In August, Tesco Bank increased its 0% purchase term from 20 months to a market-leading term of 22 months on its Clubcard Credit Card Purchases Mastercard and Barclaycard raised its 20-month 0% introductory purchase offer to 21 months on its Platinum All-Rounder Visa.
“Borrowers moving their debts to an interest-free balance transfer will find a handful of providers lengthening offers this quarter to 26, 27 and 29 months respectively.
One market-leading offer to increase from a 28-month deal to 29 months is the Sainsbury’s Bank Balance Transfer Credit Card Mastercard which charges a lower fee than its peers of 2.00%. There were several balance transfer fee reductions over the past quarter, the most significant was last month from TSB which fell from 2.95% to 1.45% on its Classic Credit Card Mastercard. Clearly, credit card providers are reviewing not just 0% terms but also the upfront cost to adjust their overall appeal to entice new business. We may well see more tweaks in the months to come as we head towards the festive season and some consumers may already be debating how to spread the cost.
“As interest purchase rates increase and 0% offers fluctuate, it's important consumers stay on top of the changing market and switch where appropriate. Those struggling financially in the aftermath of the UK lockdown would be wise to seek debt advice, check their credit report before applying for a credit card, and keep in mind that they may not always be granted the top deal advertised.”
