People less able to pay off debt on 0% balance transfer cards

Lenders are reducing the amount of time people have to repay balance transfers on 0% credit cards as they become increasingly concerned that the cost-of-living crisis means more will default on payments.

Research by Fairer Finance found the average 0% repayment period available is now 17 months, down from 21 months in 2022.

In October 2022, the longest 0% balance transfer period on offer was 34 months but this card has been reduced to 29 months.

Other 0% balance transfer deals to have been downgraded include:

RBS – down from 20 months to 23 months

NatWest – down from 30 months to 23 months

Barclaycard – down from 30 months to 29 months

Santander – down from 28 months to 26 months

TSB – down from 27 months to 24 months

Lloyds – don from 24 months to 22 months

Those who fail to repay their outstanding balance before their 0% deal expires face APRs higher than standard credit cards at over 20%.

Fairer Finance is also calling for providers to be more transparent about the downsides of 0% balance transfers, with many customers not understanding they can lose their 0% period entirely if they miss a repayment.

They also don’t believe there’s enough awareness that 0% balance transfer cards aren’t suitable for making purchases or cash withdrawals because it will accrue interest until the entire balance transfer is cleared.