Adverse Mortgages UK

Balance transfers from one credit card to another are becoming increasingly expensive as more and more providers are charging for the privilege.

The move is believed to be part of an effort to combat the rise of the 'rate tart' - individuals who frequently transfer balances between credit cards to take advantage of zero per cent offers.

However it is not just the fact that the number of providers charging to transfer balances is increasing, but also the amount they charge for doing so.

According to MoneyExpert, uncapped balance transfer fees are now the norm, with just 17 of the 133 credit cards that offer balance transfers limiting the amount they charge.

In some cases, these fees can be as high as £300, with average fees standing at two per cent of the balance transferred, although nine credit cards do have rates of three per cent.

"Playing your cards right is becoming more and more difficult as credit card providers raise the stakes on balance transfers," Sean Gardner, chief executive of MoneyExpert, said.

"The days of easy credit and companies falling over themselves to allow customers to switch between cards are over. Rate tarts are being forced to raise their game as providers take a tougher line."

Credit card providers have been forced to explore alternative revenue channels in recent months after the Office of Fair Trading ruled that credit card penalty charges were excessively high.

The consumer watchdog ruled that penalty charges should reflect administrative costs rather than act as a profit driver, meaning that credit card providers have instead been raising rates and charges for services such as balance transfers in order to recoup some of this lost revenue.


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