Winter has come to the allotment, which means leeks thrusting up proudly in the chill morning air, and a glut of firm parsnips, ripe for roasting.
But here’s another thing we’ve got a bumper crop of this year: credit cards, boasting almost absurdly lengthy rates.
Introductory rates on 0% purchase credit cards are at a high. In fact, the heftiest length of a 0% introductory deal has swelled to an eye-popping 27 months, which you can get with the Post Office’s Matched Card. Snapping closely at its heels are Clydesdale Bank and Yorkshire Bank’s 26-month offers.
To put this in perspective, the longest introductory rate in 2012 was a relatively piffling 16 months.
In fact, the market has been accelerating faster than me when I’m driving back to Casa Sanders in time for Gardener’s World. Back in 2013-14 biggest increase of an introductory rate we saw was just two months, compared to a seven-month jump between 2014-15.
But why on earth has this happened?
Well, the simple answer, as always, is competition between lenders. They’re absolutely gagging to get you on their books, particularly with a rise in the base rate of interest on the horizon in 2016.
Bumper introductory rates are the carrot – ahem – they’re currently dangling in front of us all to get us signed up. The downside is that if you don’t pay off the debt within the 0% introductory period you will be charged interest.
The appeal is clear – longer 0% periods allow borrowers to spread the cost of big-ticket items or multiple purchases over many months, making them eminently more manageable. It can also be cheaper than taking out a personal loan, providing you’ve done your sums correctly.
These rates – like my prize swedes – are ripe for the picking. They could really come in handy, particularly with Christmas coming up – again, just like my swedes.
But they’re only good if you pay off the debt you’ve racked up within the 0% term – once that’s over you could see yourself paying interest rates of upwards of 18% of whatever’s left, making it incredibly expensive in the long run.
To combat this, make yourself a clear and manageable plan to pay the debt off. So, if you’ve got your mind set on a particular big purchase you want to use your 0% card for (a new bathroom, a holiday, or Christmas, for instance) don’t add any more debt to it with more spending afterwards – you could even as go as far as to cut it up. Make sure you understand any time limits for the 0% purchase rate. Some cards have restrictions on the time in which the 0% rate applies, so make sure you check the terms and conditions before you use the card.
Then, simply set up a direct debit which will see you pay it off, ideally with a few months’ grace.
Voila – a manageable payment plan! So, if you’ve dropped £2,000 on something – say, a deluxe custom-built aquarium – you could set up a direct debit to pay off £84.33 a month over 24 months and still have some wriggle room at the end. Perfect!