According to independent financial data group Defaqto, the number of balance transfer credit cards – designed to help borrowers manage their debts – has fallen by nearly a third in the past year. There are only 66 of the deals on the market now, compared to 94 a year ago.
Smaller chance of switching from debt
Credit card transfer allows borrowers to shift existing expensive credit card debt to one that charges cheaper interest over a period of time. Some even charge 0% interest – although usually in exchange for a percentage of the transferred debt.
The available interest-free windows on these maps are also getting smaller, the research shows. TSB Platinum currently offers the longest 0% term of 29 months (at a fee of 2.95%), compared to 34 months two years ago.
Bank expert at Defaqto Katie Brain said, “It’s easy for the cost of borrowing to creep up, especially if you have a credit card with an introductory offer that has ended. There aren’t that many deals available right now and they are disappearing quickly, so it’s worth seeing if you can get a better rate with a new provider. “
Always use an online fitness check before submitting an application to protect your credit score.
Rising unemployment, falling income
The diminishing card options available to those with personal debts coincide with the broader tightening of the national wallet. The UK unemployment rate rose to 4.5% between June and August, according to new figures from the Office for National Statistics, compared to 4.1% in the previous quarter – while the number of layoffs rose to its highest level since 2009.
Even those who are still working, he says, are preparing to forgo their bonuses this year separate real-time data published by YouGov. The survey found that nearly a quarter (23%) of employees expected a bonus to be paid sometime in 2020, but only 15% now expect to receive it before the end of the year.
But while “ off-the-peg ” coronavirus payment holidays on credit cards (as well as other household accounts including mortgages, loans and insurance) close on Oct. 31, regulator has confirmed to the Financial Conduct Authority that it will. expand customized support for those who are still struggling to make payments due to the coronavirus.
If you’re concerned about debt, reach out to a free debt counseling charity such as StepChange