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Typical New Year balance transfer card war fails to appear

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January is usually buzzing with activity from providers in the balance transfer market as Brits look to clear their debts. But this year, deals are not only sparse, but they’re inferior too.

A balance transfer allows people to shift debt from one credit card to another, where the new provider pays off the old debt usually at a cheaper rate.

The New Year period typically sees a balance transfer credit card rate war as providers look to mop up customers tackling their Christmas and longer-term debts.

But this year is quieter than usual and Brits have less choice of deal compared to 2020.

According to data site Moneyfacts, there has been a general decline in the length of 0% offers available over the years and the number of products without a balance transfer fee has also fallen.

Rachel Springall, finance expert at Moneyfacts said: “Borrowers who use a 0% deal now find the time to repay before interest applies has shortened, so they’re more inclined to pay back debts sooner than they would have years ago.

“As an example, in January 2017 the longest 0% balance transfer card offer was 43 months, but today its just 29 months. Consumers looking to secure a new deal would be wise to compare offers now.

“To put you in the best possible position, it’s always wise to review your credit score. As with any debt, it is vital consumers make a clear plan to repay them before interest applies and avoid falling into a debt spiral. Those who are struggling could reach out to a debt advice charity too, to work on getting their situation under control.”

Business information site Defaqto added there are just 61 deals available today, down 25% from 81 a year ago.

With interest free periods also shrinking, the longest deal without a fee is only 18 months now, compared to 20 last year.

Katie Brain, consumer banking expert at Defaqto, said: “It is a difficult time financially for a lot of people right now and many will be starting 2021 with a debt hangover from last year. Transferring outstanding debt to a 0% balance transfer credit card can be an effective way of getting your finances back on track.

“These deals allow people to pay down their debts over a set period without an expensive interest rate.  However, borrowers should make a note of when the offer period comes to an end as these 0% rates are only introductory.  Those who don’t manage to clear their balances in this time could be in for a nasty shock when their 0% rate reverts to a costly AER, which could be as high as 34.94% (average 22%).

“Where there is the option to check your eligibility before applying, this is worth doing as the best deals on the market tend to only be available to those with an excellent credit rating. It is also important to check if there is a fee with the card as that could eat into any introductory offer. Start by looking at the bank you have a current account with as sometimes there are lower fees for balance transfer cards with your existing bank”.

Best buy balance transfer deals

Dan Kettle from finance provider,, commented “Zero balance transfer cards can be a very sensible way to move over your debt, especially during the debt hangover after Christmas. However, it is essential that you have a clear idea of how you are going to pay this credit card and avoid revolving credit. This can lead to an unhealthy cycle of debt and you may find yourself dealing with hefty fees and a negative impact to your credit score.”

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