Warning as 0% deals come to an end
Millions of credit card users have been warned to exercise caution when they come to the end of their 0% balance transfer deals - as they may become subject to hefty rate rises after their deals end.
Last year, over 5 million customers switched credit cards between April and November, in order to achieve the best deals on 0% balance transfers - but with banks increasingly tightening up on lending criteria, it is becoming increasingly difficult to switch cards in this manner.
Once the interest free period is over, the average standard balance transfer rate will stand at 16.49% - a rise of over 1% from the figure that stood in August 2007, giving an average rate of 15.11%. MoneyExpert.com, the leading online financial advisory service, has stated that rates like this will mean that users with an average credit card balance of £3000 will pay £495 in interest alone unless they successfully and quickly pay back the money they owe. This is £42 more than last year's estimated typical APR, and this rise marks a further symptom of the 'credit crunch', where banks are less likely to lend on an individual basis. It is expected that credit card customers will have to exercise a great deal of caution in the next few months.
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