MBNA opens the door to a credit card price war
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.MBNA has fired the first shot in what is predicted to be a major credit card price war in 2014.
The American credit card giant is now offering an unprecedented 29 months zero per cent on balance transfers.
The new deal from MBNA is likely to provoke a swift response from Barclaycard and possibly Halifax, Tesco Bank and NatWest, some of the most competitive players in the balance transfer segment of the credit card market.
It is almost certain we will see interest free terms breach the 30-month mark again in a market where the average 0 per cent promotional term just keeps growing.
The average zero per cent balance transfer term four years ago was 9.7 months; in 2011, it had risen to 12.1 months. Today, it stands at 14.2 months with more than a dozen cards offering an interest-free term of two years or more.
However, Andrew Hagger from MoneyComms.co.uk warns consumers against purely focusing on the length of the zero per cent deal.
"There's always a danger that some consumers will focus purely on the length of the interest-free incentive, even though they may not require or intend using the full 24-29 month zero per cent term on offer," Mr Hagger said.
"Although the potential interest savings are greater the longer you borrow at zero per cent, if you know you can pay the balance off sooner it makes sense to opt for a shorter-term deal as they often come with a much lower balance transfer fee," he added.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments