End of the 'rate tart' as card firms get tough

06/11/2008

Zero per cent balance transfer offers are being cut back on by credit card providers, figures from MoneyExpert.com have shown.

The financial website said that ten per cent fewer companies are now offering these deals, when compared with a year ago.

This is because of the credit crunch, which has hit banks' balance sheets and made them much less willing to extend credit to risky customers.

The cutbacks are bad news for "rate tarts", who attempt to manage their debts by shuttling their debts between cards in order to take advantage of zero per cent deals.

Sean Gardner, director of MoneyExpert.com, said: "These figures should send a clear message to borrowers that the credit card merry-go-round is grinding to a halt."

Kevin Still, director of EuroDebt, added: "We have already seen a rise in clients that were just about managing their finances through a combination of juggling credit card balances and withdrawing cash to pay the minimum payment on another credit account.

"With further restrictions being applied and many card issuers significantly increasing their cash withdrawal rates and balance transfer fees many consumers are now having to take professional advice as they recognise that they are going backwards every month."

Around three in four card firms are currently offering the zero per cent deals, MoneyExpert.com said.

Tags; Debt Management and Banking, Credit Card Lifestyle,

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