Consumers who took out a zero per cent balance transfer credit card at the beginning of last year could find themselves paying over the odds on their debt if they do not act fast, moneysupermarket.com has warned.
Because many customers switch to a zero per cent balance transfer credit card after Christmas each year, January is a popular month for this type of card, and with an average introductory period of 14 months, many of those who took out such deals last year will find that the offer has already ended, or soon will.
When a zero per cent deal comes to an end and the balance is transferred to the credit card provider's standard rate, consumers could find themselves paying a lot more on their debt that they bargained for, the comparison website warns, urging consumers to check with their deal is due to end.
Borrowers should be quick to move their debt to another credit card, if they have not already paid off the balance before the interest free period ends.
Often, the rate that consumers will find themselves paying is at least 16 per cent, if not more, which - on an average credit card debt of £2,000 - could add interest payments of £1,456 to the debt over its lifetime. The balance would then take more than 19 years to repay, based on making minimum repayments.
Kevin Mountford, head of banking at moneysupermarket.com, said: "An interest free balance transfer card can be a great option for consumers with existing debt who need flexibility. We would always advise consumers that they really need to make some headway in paying off the balance, but for those who have failed to clear their debt in time for the end of their zero per cent period, they should look to swap their debt to another deal before reverting to the cards' typical APR.
Commenting on the current credit card market, Mr Mountford said, "Across the board, lenders have been reducing the length of their zero per cent balance transfer deals, meaning savvy borrowers will have to keep an eye on their statements and ensure they either pay off their debt in full, or move their debt more often in order to remain on an interest-free deal, however with credit being difficult to obtain, there is no guarantees you will be able to transfer your debts in the future."
But, while it might be more difficult to secure a competitive balance transfer credit card than in the past, there are still some offers to choose from, says moneysupermarket.
One such card is the Egg credit card, which is offering zero per cent on balance transfers until August 2011, and no interest to pay on purchases until August 2010.
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