Balance transfer card deals worsen as interest-free periods shorten and fees rise

Balance transfer credit card offers have become less generous, with shorter interest-free periods, higher transfer fees and rising representative APRs, consumer group Fairer Finance reported. The shift is squeezing a common tool households use to manage existing credit balances and avoid interest while they pay down debt.

Balance transfer cards typically allow a borrower to move an outstanding credit balance to a new card and benefit from a promotional interest-free period during which no interest is charged on the transferred amount. Many parts of these offers are risk-based: Fairer Finance found 59 of 73 deals it reviewed vary terms, such as the promotional length and transfer fee, depending on the outcome of a customer credit check.

Fairer Finance said the average interest-free period for balance transfer cards has fallen to 18 months, down from 20 months three years ago. At the same time the average balance transfer fee rose to 2.67 percent from 2.18 percent at the beginning of 2022. Representative annual percentage rates charged once promotional periods end have climbed sharply this year, the group found; the average representative APR jumped to 28.8 percent in April to June 2025, up from about 23.36 percent in the first quarter of 2022.

Those changes mean consumers who do take out a balance transfer card face a shorter window to clear their debt before reverting to substantially higher ongoing interest costs. Fairer Finance noted that a borrower who does not pay off the transferred balance within the promotional period will be rolled on to a standard APR that can compound quickly.

James Daley of Fairer Finance said zero-per-cent credit cards have been a useful tool for consumers seeking to manage debt, but that “the best deals are getting harder to find.” He cautioned that advertised terms are not guaranteed, because many lenders alter the promotional period or fee after running a credit check.

Some lenders have adjusted both the length of their offers and the fees. Fairer Finance pointed to First Direct as an example, saying its interest-free period on a balance transfer product declined from 27 months to 20 months in recent years while the transfer fee rose by 0.7 percentage points.

A limited number of more generous deals remain. Fairer Finance highlighted Tesco Bank’s offer — an 18-month zero-per-cent period with a 0.99 percent transfer fee and a representative APR of 24.9 percent — and Virgin Money’s 20-month deal with a 2 percent transfer fee and a 24.9 percent APR. Virgin Money also has a longer 30-month balance transfer product available with a 2.45 percent transfer fee and a 24.9 percent APR. For consumers unwilling to pay a transfer fee, NatWest and Santander each offer fee-free products but with reduced promotional periods of about 12 months.

The deterioration in advertised deals has occurred even after three base-rate cuts in 2025, which would typically be expected to ease borrowing costs. Fairer Finance’s analysis suggests lenders are tightening promotional offers and increasing fees despite lower official rates.

Industry observers say consumers should shop around and have a clear repayment plan before switching a balance to a new card. Because many offers are risk-based, borrowers are advised not to assume they will receive the same fee or promotional period advertised and to check the terms they are actually offered during the application and credit-check process.

The findings and lender examples were reported by Money Reporter Lucy Evans in a Daily Mail article and are drawn from the Fairer Finance analysis of current market offers.