Why it's going to be harder to get a top 0% credit card

BORROWERS looking to transfer their debts from one interest-free transfer deal to another are getting worse options than before.

This is because lenders are adapting to rules announced by the Financial Conduct Authority (FCA) last year, which said that they need to ensure customers pay back their debt quicker.

Over four million Brits make minimum repayments on credit cards, but under the new rules – which came into effect in September last year, firms must notify customers who are only making minimum payments after 18 months, prompting them to up their payments.

After 36 months the card firm must then offer them a way to repay their balance over a reasonable period.

The rules by the city watchdog have now started to affect the credit card market, with the best deals disappearing in the past year.

In fact, the best 0 per cent balance transfer credit card deals have shrunk from a 37-month interest-free period a year ago to 32 months today, according to comparison website Moneyfacts.

This means customers looking to switch their debts from one interest-free balance transfer deal to another now have less time to repay their debt before interest applies.

One of the top cards on the market today, from Post Office Money, offers an interest-free 32 months to customers, but it'll also charge a two per cent fee to transfer debt across from another lender.

HSBC also offers an interest-free period of 32 months, and it comes with a slightly lower transfer fee of 1.40 per cent.

Meanwhile, a 30-month card from Sainsbury's Bank charges a three per cent fee.

This compares to the three top cards a year ago by Barclaycard, MBNA and Nuba, which all offered interest-free terms of 37 months on transfer fees of 1.40, 1.89 and 1.98 per cent, respectively.

Balance transfer cards: What you need to know

SHIFTING your balance can be a great way to cut the cost of your debt. But you must use them properly so you don’t just add to it.

Always clear your debt – Credit card firms don't offer these deals out of the goodness of their hearts. They rely on you not clearing your balance by the time the 0 per cent deal comes to an end so it can start charging you interest.

Always make your payments – If you don't keep up with your monthly payments, you could lose the 0 per cent offer and start being charged interest. Always try and pay-off more than the minimum payment too to clear your debt quicker and don't spend on the card either.

Check your deal – Like with all credit cards, you might not be offered the headline deal if you don't have the best credit history. Use MoneySavingExpert's eligibility calculator to see what deals you are likely to be accepted for.

The "steady decline" in lengthy deals is set to continue too, according to Rachel Springall, finance expert at Moneyfacts.

She told The Sun: "It’s clear to see that the credit card market is adapting to economic pressures and growing scrutiny regarding consumers with persistent debts.

"Credit card providers have diluted their enthusiasm to offer table-topping interest-free balance transfer offers since a year ago.”

"This consecutive tightening of the interest-free card market is likely to continue, particularly as we enter a period of economic uncertainty.

"Therefore, borrowers who are struggling to repay their balance would be wise to seek the help of debt advice charities before it spirals out of control.

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Apart from balance transfer cards, another way to clear debts is to get a personal loan, but what's best for you depends on your circumstances.

Shoppers can also shave up to £300 off bills by switching their store card debts onto a 0 per cent balance transfer credit card.

If you're looking to clear debts, here are eight simple ways to help you do so.

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