The credit card market has bounced back to life, with some of the longest deals in the past three years now available to borrowers, new research from Which? has found.
Since 2009, there has been a 13% increase in the number of credit cards on the market, while the longest 0%-on-purchases deal has gone up from 12 to 18 months. Providers have ramped up the competition for balance transfers too, with the longest 0% deal increasing from 16 to 22 months.
Action point: Best credit cards – read our tables to find the best credit card for your needs.
Longer credit card deals emerge
The longest 0%-on-purchases credit card deal comes from NatWest/RBS, which is offering 18 months worth of interest -free purchases. The deal is only available for customers that apply online, and reverts to a 17.9% representative APR after the 18 month offer expires.
Meanwhile, Barclaycard, Halifax and again NatWest/RBS are offering 0% balance transfer deals for 22 months, the longest in the market. Barclaycard currently charges a low transfer fee of 1.45% compared to 3.2% and 3.5% with NatWest/RBS and Halifax respectively.
Credit card costs begin to rise
But it’s not all good news for borrowers. Since 2009, the maximum balance transfer fees on many cards has crept up
from 3% to 4%. The Amazon.co.uk MasterCard, issued by MBNA, even charges a 5% fee to transfer a balance to a 18.9% borrowing rate – 2% higher than its standard rate on purchases.
Some credit card providers have also been pushing up cash withdrawal fees. In July 2009, the maximum cash withdrawal fee was 3% across the market, but this has gone up to 5% on around 25% of credit cards.
The number of cards that impose a minimum cash withdrawal fee of £5 has increased from just 2% of the market in July 2009 to almost a third in July 2012. And the average rate of borrowing on purchases across the market has increased from 16.6% to 17.6%, despite the Bank of England base rate remaining static at 0.5% since April 2009.