Credit card balance transfers ‘mostly worthless’

Due to increases in balance transfer fees, the cost of switching to an introductory offer of no interest means that “the vast majority of nought per cent balance transfer deals will become largely worthless,” a spokesman from the firm said.

Eddie Nott, deputy chief executive of M&S Money, commented: “You would like to think that nothing could be cheaper than nought per cent interest, however the spread of credit card balance transfer fees has in some cases wiped out much of the benefit of switching.”

According to M&S Money research, balance transfer fees of four per cent can become equivalent rates of 14.5 per cent and thus consumers may actually add to debt by switching to a zero rate offer.

He urged consumers to look at more than just the headline rates and carefully calculate what savings, if any, they can make by switching cards.