Finance advisors have warned borrowers to scour the fine print on zero per cent balance transfer cards or risk facing unexpected costs.
The report warned that the headline rate may not tell the whole story, particularly if a card is used for purchases as well as juggling credit.
While the balance transfer sum may be free, it is likely that additional purchases will not be, warned the Andy Britchford of Moneyfacts, who compiled the report.
Additionally, he warned that purchases may not be paid off until the balance transfer is paid for – while the purchase is accruing debt at up to 15.9 per cent.
“This may only seem a small amount, but when paid by all customers and sometimes on much greater amounts, it will soon mount up. Combined with an uncapped two per cent balance transfer fee, this is a potentially lucrative area for lenders,” said Mr Britchford.
He cited the Capital One platinum card, which offers zero per cent on balance transfers for 15 months.
One of the conditions of is a minimum £100 spend on the card however, which will not be covered until the balance transfer is paid off.
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