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More Bad News for Credit Card ‘Rate Tarts’

Consumers looking for a long term 0% home for their credit card debt will be dismayed to learn that one of the longest interest free term deals on the market is being withdrawn today. The Capital One Platinum credit card 0% balance transfer deal was launched in September this year and at the time was offering a generous 15 month 0% deal for balance transfers until 1/1/2007.

Andrew Britchford, personal finance analyst from www.moneyfacts.co.uk comments: "This is a sign of the times in the current credit card market, with PwC recently revealing that the 0% money is costing the industry over £600m per annum.

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"On top of this, there are reportedly a rising number of people defaulting on debts which is further adding to the adverse effect on lenders profit levels"

"According to moneyfacts.co.uk research, at the beginning of 2005 there were 114 credit cards offering 0% deals with a term greater than five months; this number is now down to 91 and likely to fall further. During the same period, the number of credit cards charging a balance transfer fee has increased from 12 to 41."

"Capital One will certainly not be the last big card player to withdraw from the 0% war, and with conditions still tough in this market, providers will be looking at alternative ways of reducing their share of the £600m annual cost of providing this ‘free money’."