Credit Cards & Loans
Interest-free credit card deals slashed by lenders
Borrowers looking to transfer existing debts to a credit card with a 0% interest offer will find there are less suitable cards than pre-Covid-19 – and those that are available come with shorter 0% interest periods.
Research by Moneycomms found that Barclaycard has taken the biggest step back and cut its longest 0% balance transfer term from 27 months to just 18 months. Halifax and Virgin Money have both chopped their 29-month offers back to 22 months.
MBNA, Sainsbury’s Bank and Tesco Bank were all offering 29 months interest-free on balance transfers in March, but all of these deals have now been dropped to 26 months.
Andrew Hagger, founder of Moneycomms, said: “The coronavirus pandemic has changed the credit landscape almost overnight, with lenders wary of a deep recession and a surge in unemployment in the months ahead.
“Card companies will be ultra-cautious knowing there will be a wave of defaults and bad debts on the horizon once the furlough scheme winds down and the repayment holidays come to an end.
“For borrowers who have been shifting balances from card to card over the last few years, the choice of new deals and length of deals are dwindling on a weekly basis and many may struggle to switch again when their current 0% deal expires. Those heady days when you could get 43 months interest free are long gone.
“The longest 0% BT deals still available are from NatWest, TSB and M&S Bank, all currently offering interest free card switching for 28 months, however the way the market is moving, these deals could well be trimmed back in the coming weeks.”