(PRWEB) June 26, 2010
New research by Moneysupermarket.co.uk, has revealed the number of credit cards offering 0% interest on purchases for at least 10 months increased by 450% during the past year. Adding further weight to the claim of resurgence in the credit card market, the number of cards offering 0% on balance transfers for 10 months or more has increased by 20%.
The research highlights that one year ago, there were just two cards offering a 0% on purchases service (of at least 10 months). When the latest research was conducted, there were 11.
The increase in competition, however, has done nothing to halt the average interest rate from rising. With a number of providers hiking their rates since the start of the year, the average rate is now at 18.7%.
A spokesperson also stated that credit card companies have taken the time to assess the market and now feel comfortable with doing business in the current economic environment. Competition has returned to the credit card market and card providers are actively trying to attract new business.
Derek Oakley, Insolvency Director at Debt Free Direct, says the extended period of 0% interest on purchases, can be beneficial for consumers, “If used properly, the 0% purchase deals for extended months is still a viable option for many consumers. However, it is important to stay within your limits and pay off the difference by the final month, otherwise you could be in for an unpleasant surprise in the form of increased interest rates.”
The credit card market is braced for further change in the coming months, as card providers will be forced under new rules to move to a positive payment hierarchy from January 2011. The new ruling will allow card holders to pay off their most expensive debts first, such as cash advances.
This would be a major shift from the current negative payment hierarchy which means it takes card holders longer to pay off their debts if they are only meeting negative payments each month.
Debt Free Direct is the UK’s leading provider of IVA s and offers free and impartial debt advice on serious debt problems. Established in 1997, the company advises over a thousand people a week on different debt solutions, such as Debt Management Plans (DMP), Individual Voluntary Arrangements (IVAs), and bankruptcy.
Debt Free Direct has a commitment to helping vulnerable consumers struggling with large amounts of debt. The company has also been active in campaigning for tighter regulations within the debt industry.
To keep up to date with the latest in UK debt and personal finance news, visit the Debt Free Direct blog and news sections of their site, http://www.debtfreedirect.co.uk.