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Furthermore, the credit crunch is worsening with new initiatives by the Bank of England being launched this month to try and save our wallets.

With the financial markets in crisis, credit card companies have to find new ways to compete for our custom and the most common, current deal available is an extended period interest free and 0% on balance transfer fees. However, not all credit card companies are on board just yet.

Fees and competition

Barclaycard are making a concerted effort to draw in more customers this month and they have not only taken over Goldfish and Morgan and Stanley Credit cards in the past quarter, both of which offer holders numerous rewards, but they are also offering new OnePlus card customers a reduced balance transfer fee.

In fact, they’ve cut their balance transfer fee down from 3% to just 2.5%. Experts have hailed this the beginning of a price war as other companies jump on board the cut-price balance-transfer wagon.

“It’s a very competitive market right now,” one leading financial expert said and it’s clear that credit card providers can no longer compete on 0% interest deals alone.

Virgin recently released a card with a 16 month interest free period, but the balance transfer fees are still over 2%.

Consumers expect increasingly more rewards, lower balance transfer fees and longer interest free periods and it seems that they are getting precisely what they demand.

Finance analysts are saying this shift towards lower fees is a surprise given the financial climate but that companies can see that it looks good on paper and that they think it will help them get more, responsible, long-term borrowers interested in their products.

Expert advice

Experts say that consumers should do very good maths when deciding which deal to choose. If, for example you won’t be able to pay off your full balance before an interest free period has ended it might be a better idea to go for a deal which has the longest interest free period you can find rather than worrying about getting a saving on the balance transfer fee.

They also warn that while in the past it might have been easy to hop from one card to another, as banks tighten up on their lending to try to prevent the recession, this won’t be possible in the future. So, be sure to choose a card you can stick with, should you have to!

In the future, some of these deals could dry up completely just like 100% mortgages did last year, so if you want to take advantage of them and haven’t yet, now is a good time.

Three quarters of all credit cards offer a 0% deal on balance transfers right now, so snap a deal up soon and lower your interest payments.

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Credit Cards	Balance Transfers	Purchases	APR Representative (Variable)
	Tesco ClubCard Purchases Credit Card
	0% 9 months 2.9% fee	0% 16 months	16.9%
Representative Example: The annual purchase rate is 16.9% p.a (variable) so if you spend £1200 your representative apr will be 16.9% p.a (variable)
	Barclaycard Platinum With BT (27 Mths)
	0% 27 months 3.5% fee	0% 6 months	18.9%
Representative Example: The annual purchase rate is 18.9% p.a (variable) so if you spend £1200 your representative apr will be 18.9% p.a (variable)
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