British shoppers were issued a warning as researchers at Fairer Finance said fewer credit cards were offering 0 percent purchase offers and lenders were slowly increasing their interest rates.
The group found the average 0 percent purchase period available to consumers has fallen from 312 days at the beginning of 2022 to 250 days today.
The number of long-term zero percent purchase card options has dwindled.
At the beginning of 2022, four cards offered 0 percent for 24 months. These included Barclaycard, RBS, NatWest and Ulster Bank.
Today, just Tesco Bank offers a long-term no-interest deal.
Fairer Finance also found a steady rise in interest rates:
- The average representative APR for 0 per cent purchase credit cards rose from 21.9 percent in 2022 to 24.9 per cent today.
- The average standard APR has reached 24.9 per cent from 21.9 percent over the same period.
- The maximum APR has climbed even further, jumping from 27.9 percent at the end of 2021 to 29.9 percent in December 2024.
James Daley, managing director of Fairer Finance, said that while most people will be taking out these cards hoping to pay them off before the 0 percent promotional period ends, the reality is that many won’t achieve that – and will now be left paying even higher rates once their offer expires.
He said: “If you have the choice, it’s definitely worth choosing a card with a lower interest rate to minimise the cost in case you’re unable to pay off or switch your debt by the end of the offer.”
Fairer Finance urges consumers to compare credit card options carefully and consider their repayment plans to avoid falling into costly debt traps as borrowing becomes more expensive.