Rachel Springall, Finance Expert at Moneyfacts, said:

“Consumers looking for an interest-free credit card may be pleased to see a few providers have improved their offers. Since the start of November there has been an injection of competition into the market for purchase and balance transfer offers. This is an ideal time for their arrival for shoppers and those looking to consolidate their debts as we near year-end. One of the new deals comes from Barclaycard, which currently sits as the longest 0% purchase offer at 22 months, but also boasts a 19-month balance transfer deal. There were also terms extended within the market on 0% purchase and balance transfer offers, including NatWest. However, with the average balance transfer fee rising to 2.44% this quarter, it’s imperative customers compare fees carefully before they apply.

“Shoppers looking to get a bit of cashback will find there has been a new deal from Virgin Money entering the fray this quarter. There are 15 cashback cards on the market, the biggest count since May 2017 (15). However, borrowers using credit cards for their shopping would be wise to pay off any balance before interest applies, or they could wipe out any cashback gains. The average purchase rate now stands at 35.3% APR, up from 34.6% APR a year ago. Those borrowers with multiple credit cards may then be better off by consolidating their debts with an unsecured personal loan. However, like credit cards, some average rates on loans have risen year-on-year but have dropped slightly over the past quarter. Lenders would traditionally price their loans in response to future rate expectations while also assessing their attitude to risk, as when the risk of defaults is elevated, the cost to borrow would usually rise. It will be interesting to see if rates come down during 2025 for borrowers looking to take charge of their debts. Those who fear they are falling into a debt spiral should seek advice from a debt charity or ask their lender for support.”