Even less choice for balance transfer customers : Credit Card Guide

Even less choice for balance transfer customers

Customers have been taking advantage of balance transfer credit cards for some years now, with many looking to save money on the interest that they pay on their borrowing by opting for a 0% balance transfer credit card. However, like other areas of finance the credit card industry has been affected profoundly by the global credit crunch, and officials are now warning that the choice of cards for those looking for balance transfer is becoming extremely limited.

Many balance transfer deals have been cut over recent months, with others disappearing from the market altogether. Credit card providers have also made a number of changes to their cards, with some having raised interest rates, balance transfer fees, and other charges, and others tightening up on their lending criteria to the point where only those with the best credit ratings can get their hands on a balance transfer credit card.

This has made things very difficult for those wishing to save money on their credit card balances by transferring balances, and in particular for those that like to switch credit cards regularly in order to save money on interest, known as being a rate tart. The lack of availability means that being able to switch your credit card balance has become far more difficult, and this could mean more people having to shell out a small fortune in interest – or pay higher balance transfer fees.

There are also concerns that this lack of choice and increased expense for consumers is having a knock on effect on consumers' ability to make other payments, including their mortgage repayments. One official said: "If people can't afford their non-priority debts anymore sometimes they'll stop paying their mortgage as well. It's definitely having a knock-on effect."

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