According to TotallyMoney, over the past 12 months, banks have improved offers by an average of five months, with most big banks now offering more than 30 months at 0% interest for customers shifting debts to a new card.
Calculations by the credit reporting site showed that with the average interest-bearing balance of £3,002 and a typical 3.5% fee, moving a balance to a 0% card could save the typical borrower £1,568.
According to TotallyMoney figures, one in two (48.6%) credit card customers are paying interest on their balance each month and could benefit from a balance transfer.
Meanwhile, credit card debt continues to grow, with the average interest-bearing balance increasing by £103 (from £2,899 to £3,002) in the past year.
What is a balance transfer credit card?
For a small fee of 3-4%, a balance transfer credit card lets you shift your credit card debt and stop paying interest for a set amount of time.
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Longer balance transfer lengths mean longer periods without paying interest and bigger savings.
New TotallyMoney research conducted by Moneycomms found that in the past year, average balance transfer lengths have improved by almost five months.
Natwest currently offers 34 months at 0% interest, while Barclaycard, HSBC, MBNA, and Tesco Bank all offer 33 months.
According to Totally Money, a customer shifting the average interest-bearing balance to the leading NatWest 34-month offer could save £1,720 over the duration of the 0% period.
Borrowers can save hundreds of pounds
Alastair Douglas, CEO of TotallyMoney, said: “Balance transfers have been getting better, with most big banks now offering more than 30 months interest-free. And with half of credit card customers paying interest each month, and the amount owed continuing to grow, now’s the time to check your eligibility, and save hundreds, if not thousands of pounds.”
Andrew Hagger, personal finance expert at Moneycomms, said: “Credit card lenders are fighting tooth and nail to win balances from their rivals, and as a result, 0% deals just keep getting longer, which is great news for consumers who wish to shift an existing card balance and save some significant interest costs into the bargain.
“The way the competition is hotting up, I wouldn’t be surprised to see a three-year 0% deal on offer before the end of 2025.”
