Following the introduction of new measures
designed to tighten up lending rules, experts have warned that the
zero per cent balance transfer
credit card could disappear.
Using a
zero per cent credit card, Britons have been able to transfer
their
debts from one card to another for a small fee and pay no
interest on the balance for about six months.
However, under new rules, the government has stopped
credit card companies from insisting that any money paid off is
used to repay the cheapest
debt first, keeping the expensive debt on the card for as long
as possible.
Peter Harrison,
credit cards expert at moneysupermarket.com, revealed that
recent research found that almost two-thirds of consumers
don't realise that the cheapest debt is paid off first on the
majority of
credit cards.
He added: Cardholders should be aware that this change in
payment order may have some unintended consequences, for example a
reduction of zero per cent
balance transfer deals .
Meanwhile,
Virgin Money recently launched a
new credit card that offers
interest-free periods on
balance transfers and purchases.
