One of the best rate credit cards on the market has declared that it has cut its deal.
The Capital One Platinum credit card had previously offered a zero per cent balance transfer until 2007, but it has now cut this balance transfer term down to just six months.
“This is a sign of the times in the current best rate credit card market, with a recent report revealing that zero per cent balance transfer deals cost the industry over £600 million per annum,” best rate credit card analyst Andrew Britchford told My Finances.
“On top of this, there are reportedly a rising number of people defaulting on debts which is further adding to the adverse effect on lenders’ profit levels.”
Of the 110 best rate cards offering a zero per cent balance transfer deal for more than five months at the beginning of 2005, almost a fifth have reduced their terms ñ and the number still offering decent balance transfer deals is falling all the time.
Over the same period the number of cards charging on balance transfer transactions has risen from 12 to 41.
“Whilst the zero per cent balance transfer deals on offer have been great for consumers, the question remains of how far providers can go in offering ever-longer zero per cent deals,” said best rate analyst Peter Gerrard
“The longer the period, the harder it is to make a profit.” Lloyds TSB and HSBC are among the providers who have so far stuck by their balance transfer offers.
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