Balance transfer credit cards allow you to transfer debt from one credit or store card to another. You then pay the new lender back often at 0% interest and usually for a fee.

While this offers some breathing space for paying back debt, the length of interest-free balance transfer credit card terms is getting shorter, according to research.

People now need to pay off their debts six months earlier to avoid paying interest, based on the longest deal available today compared to a year ago, analysis by Moneyfacts found.

At the same time, balance transfer fees are on the rise, so borrowers are paying more to shift their balance from one card to the next.

According to Moneyfacts data, the average balance transfer fee has risen to 2.25%, up from 2.04% in January and 2.14% a year ago.

Since the start of the month, Barclaycard, Bank of Scotland, Halifax, Lloyds Bank, Tesco Bank and Virgin Money have cut their interest-free balance transfer offers or their 0% purchase offers. The latter allow you to buy things and repay the balance without paying interest. While the longest 0% term you can get is considerably better than a decade ago (29 months v. 12 months), it’s still down on a year ago.

‘Disappointing to see interest-free credit card offers being reduced’

Rachel Springall, finance expert at Moneyfacts, said: “In the last month alone we have seen several providers slash their interest-free deals, which has included some of the longest deals around. For instance, Lloyds Bank has slashed its 34-month interest-free balance transfer card to 32 months, while just last week, Tesco Bank and Barclaycard cut their 33-month deals to 30 and 32 months respectively, leaving just one 0% offer for 33 months in the market (MBNA).

“The cost to move debt is also on the rise, and with economic uncertainties just around the corner it wouldn’t be surprising to see balance transfer fees rise further still as providers increase the cost to sustain other card features. One of the longest interest-free credit cards available today comes from MBNA at 33 months, but it would cost borrowers £99.50 upfront (1.99%) based on a £5,000 debt.”

The amount of debt consumers are accumulating is on the rise, with recent statistics from UK Finance highlighting that £10.7bn was spent on credit cards last month, the highest total since records began over 20 years ago. It’s also estimated that 54.5% of credit card balances bear interest.

“Credit cards should not be treated as a crutch for debt, but if consumers are using them to make ends meet, it is a worrying sign that the offers are becoming less competitive, especially if household circumstances change and they have no means to pay for financial emergencies,” Springall said.