MoneyExpert: Rises about to hit 5 million 'rate tarts'

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www.moneynews.co.uk > Credit cards > MoneyExpert: Rises about to hit 5 million 'rate tarts'

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MoneyExpert: Rises about to hit 5 million 'rate tarts'

Many credit card customers who switched to zero per cent balance transfer deals are about to be hit by rising rates as the offers expire, MoneyExpert.com is warning.

The comparison website says that five million people changed their credit card providers between April and October last year.

This means millions of zero per cent deals are about to expire.

MoneyExpert.com says the average standard annual percentage rate (APR) on balance transfers has increased from 15.11 per cent in August 2007 to 16.49 per cent now.

"Rate tarts" who commonly switch credit cards for interest free deals are now warned by MoneyExpert that they will soon have to pay up or face increased repayments as lenders tighten their criteria.

According to the site, someone with a credit card balance of £3,000 from a balance transfer will generally pay £494.70 a year just in interest unless they pay back the money.

Earlier this month, Lloyds TSB found that rate tarts were declining as the credit crunch bites.

Only 22 per cent of people said they were willing to go after the best rates, while 66 per cent said they were now looking for financial deals that were attractive over the long term.
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