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Credit card deals: Longest 0% offers on the market following FCA announcement

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Credit cards can be useful for people looking to cover unexpected expenses, build a credit rating or simply find an alternative payment measure to cash. Coronavirus has also affected how credit card payments are managed and with Christmas approaching, usage of these cards is likely to rise.

Indeed, according to analysis from Finder, UK shoppers are expected to spend an estimated £6billion on Black Friday and Cyber Monday purchases this year.

Reportedly, some retailers have already started to make reductions in preparation for December and as such, consumers may want to get ready to take advantage.

While the sheer number of credit card deals available may intimidate some people, moneyfacts.co.uk have eased some of that stress by collating the best introductory zero percent deals available at the moment.

Currently, consumers have two options available to them.

For those looking for the longest introductory zero percent balance transfer credit card, the best deal comes from TSB, who currently offer zero percent for 29 months (with a 2.95 percent balance transfer fee).

For the longest introductory zero percent purchase credit card, M&S Bank Shopping Plus MasterCard offers the best option, with zero percent offered for 20 months.

The length of these offers can at first glance appear generous but they are substantially lower than what was on offer in previous years.

In 2017, the best offer for balance transfers lasted for 39 months, with the best purchase credit card deal lasting 31 months.

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Rachel Springall, a Finance Expert at moneyfacts.co.uk, commented on the changing credit landscape: “As we enter a period of anticipated spending by shoppers looking to get a bargain or two, now is a good time to review how any goods will be paid for in light of the Coronavirus pandemic.

“Some consumers may well use any accumulated disposable income to do so, but others may prefer to use a credit card.

“It is clear to see that the length of 0 percent balance transfer credit cards and 0 percent purchase cards have shortened over recent years, so much so that consumers will now need to pay off debts ten months earlier than they would have three years ago on a balance transfer card, if they wish to avoid paying interest, based on the longest deal today compared to 2017.

“If shoppers acquired the top interest-free purchase card today from M&S Bank and spent £3,000, they would need to repay £150 per month to clear the debt before interest applies.

“However, they would have had 11 additional months to repay their debts in 2017 with the top card from Sainsbury’s Bank and therefore could have reduced their monthly repayment to around £97 per month and still cleared the debt before interest applied.”

Rachel went on to breakdown how the usefulness of these deals can be affected by consumer’s actions: “The most cost-effective deal depends on how long consumers feel comfortable to pay back their debts, for example with zero percent balance transfer cards the top deal from TSB for 29 months charges a transfer fee of 2.95 percent which is a charge of £88.50 on a debt of £3,000, but there are fee-free options available elsewhere.

“The top fee-free balance transfer credit cards on the market today are from Santander and Sainsbury’s Bank both of which have a 0 percent balance transfer term of 18 months.

“Therefore, if consumers can pay off their debt within this period, £167 per month approximately for a £3,000 debt, they would save themselves £88.50 compared to the longest zero percent balance transfer offer on the market.

“It’s wise for consumers to check their credit score before they apply for a credit card, such as with Experian, to ensure they are in the best possible position.

“If shoppers want to take advantage of discounts but are worried about overspending, then it is a good idea to start making a list and budget now before the peak of Black Friday and Cyber Monday hits.”

Credit card holders were offered support from the government in recent months as payment holidays were extended to short term personal debts.

While this support was set to end on October 31, the FCA announced an extension of said repayment pauses following the announcement of a second lockdown in England.

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