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The number of interest-free credit card offers has fallen to its lowest level in 13 years with banks shying away from the market amid fears over excessive consumer debt.
January is typically a month when many people look to reorganise their finances following the expensive Christmas period. However, those looking to take out a new credit card have found choice was severely limited.
Data from Moneyfacts, a financial industry analyst, showed that the number of 0pc balance transfer deals has fallen from 122 at the start of 2017 to 76 today.
Balance transfers cards are used by borrowers to shift debts away from expensive cards, typically to those offering lengthy interest-free periods.
Moneyfacts said that the balance transfer market was now smaller than at any time since January 2007.
The initial period for 0pc balance transfer has also been reduced. In January 2017, MBNA offered a market-leading 43-month interest free period. Today the top offer, still from MBNA, is just 29 months.
The average interest free period has fallen from 659 days to 536 days – the lowest figure since 2015. This means customers who took out a deal in 2017 will see the interest-free term expire this year – and will have to contend with a more restrictive market.
The shift follows several warnings over the levels of debt carried by customers.
In December, the Office for National Statistics reported total household debt had grown 11pc since April 2014 and hit £1.3trn. Around 9pc of this figure – some £119bn – was accrued via credit cards and personal loans.
The City watchdog, the Financial Conduct Authority, has also introduced rules which limit how much card companies can charge customers in persistent debt.
Around four million accounts are said to be problem debtors but banks had little incentive to help such customers as they generated substantial profits.
Despite the changes, Rachel Springall, of Moneyfacts, said it was still difficult for customers with large debts to refinance onto cheaper deals. Most providers charge a large percentage fee when transferring away to another credit card.
For example, the current best buy card, from MBNA, charges a fee equivalent to 2.75pc of outstanding debt when consumers switch.
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