Heads up money fans!
New research from Gocompare.com has revealed that the 0% balance transfer credit card market is well and truly ‘popping off’ at the moment, with the longest deal currently almost doubling that of the market-leading offer in 2012.
The stats boffins at Gocompare.com found that both the longest deal available and the average introductory period have risen year on year.
The average length of a balance transfer deal has jumped from 15 months in 2012, to a positively eye-popping 24 so far in 2016.
But woah there!
Before you delve headfirst into a balance transfer deal, we’ve got some sage wisdom from Gocompare.com’s resident allotment-loving finance whizz, Matt Sanders.
“When looking for a balance transfer card, it’s worth considering whether you’ll need the full amount of time offered by the card to pay it off,” cautioned Matt. “For those who are looking to transfer smaller debts, or are confident in being able to pay off the debt sooner, then a card with a shorter 0% period and a lower or no balance transfer fee may be worth considering.”
Sanders added: “It’s also worth remembering that while there are some extremely long deals available right now, the headline rates are typically reserved for those with a good credit history.
“Be aware that frequently applying for credit cards can negatively affect your credit rating which can impact your chances of getting credit in the future. When looking for a new card, be sure to use a comparison site which offers a ‘soft search’ service, like Gocompare.com, that can tell you how likely you are to be accepted for a card before you apply, without impacting your credit rating.”
Also, make sure you budget properly and aim to pay off the balance while you're still in the 0% period. When that's over, you'll have to pay interest on the remaining balance, which could prove expensive.
If you do reach the end of the interest-free period and still haven't repaid the full balance, you could consider switching to another balance transfer card, but be wary that this may mean paying a fee, which is usually a percentage of the balance being transferred.