Credit cards competing for your business

There is now increasing competition in the credit card market, with many providers offering improved deals to entice new customers. A market-leading balance transfer deal has been launched by the Clydesdale Bank and Yorkshire Bank, which are both part of National Australia Bank, offering 0 per cent interest on balance transfers for 16 months, in addition to 0 per cent interest on all purchases for the first three months.

This deal is slightly better than that of Virgin Money, who recently introduced a deal that offered 0 per cent on transfers for 14 months. This increased competition is good news for consumers, and other providers may follow suit after a difficult last couple of years, in which margins were forced down, and the number of 0 per cent balance transfer deals available were reduced.

According to financial website moneynet.co.uk, there were 80 different 0 per cent balance transfer deals on the market in 2008, half of which were for a year or more; however, by last year the number of different 0 per cent interest cards had dropped to just 52, with only 24 of them lasting for at least a year. The last year has proved more optimistic, with the number of different 0 per cent interest deals has nearly back to the level of 2008 level, at 71, with 39 of them for a year or more.

With credit card debt being a big problem in the UK, transferring your credit card balance to a new card with a fixed period of 0 per cent interest could save you hundreds of pounds.