Credit card holders switching deals to save money

11 April 2005
Financial experts have revealed that a large number of credit card holders are taking advantage of zero per cent balance transfers to save money.

According to financial comparison service Moneyfacts and website moneysupermarket.com, an increasing number of credit card providers are beginning to charge for these transfers in an effort to recoup the losses made by holders who are frequently transferring their balances.

"This time last year credit card companies were clambering for customers to transfer their debt," Moneyfacts' Samantha Owens explained.

"At this time charges for balance transfers only affected a few cards. Now there are an increasing number of providers in the market going down this route."

As credit card holders become increasingly financially savvy, they shift their debts from card to card when their zero per cent deal expires - leaving it harder for providers to make a profit.

"The days of long zero per cent balance transfer deals without a fee could be numbered as all providers will be looking at ways to avoid losses accrued from customers that frequently 'churn' their debt from one card to another without using the card for purchases," said Peter Gerrard of moneysupermarket.com.

Mr Gerrard warned potential 'churners' to remember that the cheap deals only last a limited time, after which interest rates can climb steeply.

Click here to find the best deal on credit cards.

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