Increased competition in the market means borrowers have a range of competitive credit card deals to choose from.
The number of interest-free purchase credit cards available rose to 62 at the start of December, while the average interest-free term also increased to 262 days.
This is according to the latest data from the Moneyfacts UK Unsecured Lending Trends Treasury Report, which analyses the UK personal finance market.
Not only are both of these figures an increase from September (when the previous report was published), but they are also higher than this time last year.
In December 2023, borrowers only had 57 interest-free purchase credit cards to choose from, while the average 0% term stood at just 244 days.
With the festive period in full swing and many of us trying to manage our Christmas spending, these changes in the credit card market will be welcome news to shoppers.
“One of the new deals comes from Barclaycard, which currently sits as the longest 0% purchase offer at 22 months, but also boasts a 19-month balance transfer deal,” noted Rachel Springall, Finance Expert at Moneyfacts.
“There were also terms extended within the market on 0% purchase and balance transfer offers, including NatWest,” she added.
Last updated: 13/12/2024
Account Name: Platinum 19 Month BT and 22 Month Purchase Visa
0% introductory purchase offer: up to 22 months
0% introductory balance transfer offer: up to 19 months
Balance transfer fee: 3.45%
Representative example: Based on a credit limit of £1,200.00 charged at 24.9% variable per annum for purchases. Representative 24.9% APR variable.
As with purchase credit cards, the number of 0% balance transfer credit cards on the market increased to 63 at the start of December.
Similarly, the average 0% balance transfer term rose from 502 in November to 512 in December as a number of providers increased their interest-free periods.
A balance transfer is when you move debt from a credit card charging interest to a specialist balance transfer card that charges a lower rate of interest, or no interest at all. You often need to pay a balance transfer fee when moving your debt.
The longest 0% balance transfer period currently available is 30 months after HSBC and Barclaycard both extended their terms over the past couple of months.
Last updated: 13/12/2024
Account Name: Balance Transfer Credit Card Visa
0% introductory balance transfer offer: up to 30 months
Balance transfer fee: 3.49% (min £5)
0% introductory purchase offer: 3 months
Representative example: Based on a credit limit of £1,200.00 charged at 24.9% variable per annum for purchases. Representative 24.9% APR variable.
Account Name: Platinum 30 Month Balance Transfer Visa
0% introductory balance transfer offer: up to 30 months
Balance transfer fee: 3.45%
0% introductory purchase offer: 3 months
Representative example: Based on a credit limit of £1,200.00 charged at 24.9% variable per annum for purchases. Representative 24.9% APR variable.
However, in less positive news, the average balance transfer fee edged higher to 2.44% in December, compared to 2.42% one month ago. As a result, it’s important for borrowers to compare deals to make sure they choose the best option for their situation.
If you can afford to clear your credit card balance each month, a cashback credit card could be worth considering.
There are now 15 cashback cards available, the most there have been since March 2017, so borrowers have a good choice of deals to choose from.
Virgin Money entered the market this quarter, with its Everyday Cashback Credit Card Mastercard offering 0.25% cashback on purchases.
However, there are other credit cards that can offer a greater level of cashback, and some cards may offer even higher cashback rates if you shop at certain retailers.
When choosing a cashback card, it’s important to check the terms to make sure it’s the most suitable and most beneficial option for your shopping habits.
Bear in mind that you should aim to clear the balance on a cashback credit card in full each month to avoid paying interest, otherwise the interest charges could cancel out any cashback benefits.
Visit our charts to compare cashback credit cards and see the different features they offer.
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Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfactscompare.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
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