Low Interest Credit Cards

Credit card providers have endured a difficult time during the past two years, owing to a combination of the credit crunch, rising bad debts and increasing pressure from the Government to treat customers fairly.

Unsurprisingly, as their margins came under pressure, there was a sharp fall in the number of 0pc balance transfer deals on offer. In 2008 there were 80 different 0pc balance transfer deals on the market, half of which were for periods of 12 months or more, according to financial website moneynet.co.uk.

But by last year the number of different 0pc interest cards had fallen to just 52, only 24 of which were for at least a year. However, in the past year, the number of different 0pc interest deals has nearly returned to its 2008 level, at 71 – 39 of which are for 12 months or more.

Peter Harrison, credit cards expert at moneysupermarket.com, said: “Yorkshire and Clydesdale banks have not traditionally been proactive players in the credit card best buy tables, so to see them make such a bold move is very pleasing.

“There has been concern that forthcoming changes to the credit card market would have a negative impact on the balance transfer market with some of the leading players reducing their offers recently. This product launch is a good sign that providers remain keen to compete strongly in the credit cards arena.”

But Andrew Hagger of moneynet.co.uk warned that only people with top credit scores were likely to qualify for the new card. He said: “While it’s good to see new products being launched and availability back up to 2008 levels, lenders will still be operating very tight credit scoring strategies.

“If your credit record is squeaky clean then the garden looks quite rosy although the size of the credit limit you’ll be offered is likely to be much smaller than you’d have seen a couple of years back.

“If your credit rating is tarnished then the experience is likely to be less positive and you may find your application for market leading introductory offers declined or that you’ll be offered plastic but with a higher than standard rate of interest.”

The Clydesdale Bank and Yorkshire Bank credit card charges a balance transfer fee of 3pc, with interest typically reverting to 16.9pc at the end of the 0pc period.

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