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Consumers favour short-term 0% interest when searching for balance transfer deals

06 February 2013

When it comes to sniffing out a good credit card balance transfer deal, consumers are opting for shorter term 0% interest offers rather than longer term deals on the grounds it “can save a considerable sum”.

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According to new research for Nationwide Building Society, one in five credit card holders who would consider transferring their balance would prefer to get hold of a shorter-term 0% interest deal with a lower balance transfer free standing at around 1%.

These are the clear preference over longer-term 0% interest deals with a higher balance transfer fee (typically around 3%), with just 17% of respondents saying they would choose such a deal.

Paul Carvell, Nationwide's head of credit cards, said: “More and more credit card holders are opting for a smaller fee over a longer term because it can save a considerable sum.”

Balance transfer cards allow credit card holders to move their balance as a way of managing built-up debt. 
The free 0% balance transfer period, which varies from card to card, leaves the individual in question free to pay down the credit card balance without incurring additional interest charges. As such, balance transfer cards can prove an excellent method of reducing debt. 

Almost a third of those surveyed said they would be influenced by other factors rather than the balance transfer fee or the term of the deal.

Mr Carvell said that consumers are “evidently also looking beyond the cost of fees or length of the zero interest term for a better all round deal.”

He said: “Other factors that card holders may consider when looking to transfer credit card balances to a new card include cashback offers, rewards such as commission free foreign transactions or shopping benefits, loyalty points and discounts and excellent customer service.”

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