Monday 20th November 2006
Research from financial data service Defaqto has anticipated a decrease in the number of cards offering free credit card balance transfers.
A study conducted by Defaqto into credit card charges found that five companies, including Sainsburys Bank, now impose no fee on credit card balance transfers.
However, many were seen to increase their penalties to three per cent ahead of moves to increase data sharing between credit card operators.
Defaqto said it "believes providers will withdraw from the market over the next few years".
"Cahoots credit card was closed to new customers at the end of September," it added, although it noted that Cahoot has not ruled out returning to the market and continues to provide services for existing customers.
The report predicted fixed monthly charges for credit cards following a decision by the Office of Fair Trading to place a £12 cap on penalties for missing a repayment.
It added that reliable customers are more likely to be subject to such fees as those who regularly default can be targeted by interest rate rises.
Sainsburys Bank provides its new customers with a five-month interest-free period on credit card balance transfers and purchases.
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