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Zero Percent Interest On UK Credit Cards Extended

by Jim ONeil on August 1, 2011

in credit cards

Though the average APR on UK credit cards has increased during the past five years, special introductory rate programs have improved. This information was recently revealed by Defaqto, a financial research and software organization.

The data reflects some interesting trends and provides consumers with guidance on where to find the best deals.

The company discovered that the length of zero percent interest periods on balance transfers has doubled since July 2006. During the same period, the average APR for a UK credit card increased from 15.8 to 18.4 percent.

Fifteen months is the longest period of zero percent APR on purchases. Both the Tesco ClubCard and the Marks & Spencer Credit Card include this offer.

According to David Black, insight analyst for banking at Defaqto, the most attractive deals in the credit card market are designed for new customers. This makes it worthwhile for people with good credit to change cards regularly.

These consumers should look for cards that match their usage such as a rewards card for someone who repays the entire card balance each month.

Mr. Black stated that consumers will have difficulty finding a single credit card featuring the best deal for every type of usage. He suggested that consumers hold multiple cards, using each for a designated purpose.

Proper use of credit cards can avoid the need to apply for bank loans for major purchases.

Though loans bank provided often feature a lower APR over the long term, the application and approval processes are more involved and take longer. Consumers should look for credit cards with long periods of zero percent interest and pay off the balance within the interest-free period.

If they have balances on multiple cards, they can consolidate these onto one card via a balance transfer that carries zero percent interest and pay off the combined balance within the promotional period.

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