The consumer group estimates borrowers pay around £334m in balance transfer fees each year but the vast majority of people do not understand the costs involved.

In a survey of 2,000 UK adults, seven out of ten wrongly thought the transfer was completely free.

According to Which? one in five people who took out a new credit card in the last two years did so to make a balance transfer, making it even more concerning that so many find it difficult to work out the cost of these deals.

The group is calling for the Financial Conduct Authority (FCA) to look at balance transfer fees as part of its investigation into the credit card market to stop people being misled, and help them pick the best card for their needs.

It said the regulator should consider looking at whether the fee should be shown as a monetary sum rather than a percentage, or even consider banning firms from advertising deals as ‘0%’ when there is a fee.

Which? executive director, Richard Lloyd, said: “Too many credit card deals appear to include sneaky fees designed to catch customers out. With millions now using credit cards to pay for essentials, it’s vital that the Financial Conduct Authority takes action to ensure consumers are well protected. We want the regulator to scrutinise balance transfer deals and make it easier for people to understand their true cost.”

Read YourMoney.com’s guide to balance transfer cards here. 

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