Credit card balance transfer deals shrink as fees and default APRs rise, Fairer Finance finds

Credit card balance transfer offers have become less generous for consumers, with shorter interest‑free periods, higher transfer fees and rising representative annual percentage rates (APRs), according to an analysis by consumer group Fairer Finance.

The group found that the average promotional interest‑free period on balance transfer cards has fallen to 18 months from about 20 months three years ago, while average balance transfer fees have risen from 2.18 percent in early 2022 to 2.67 percent. Representative APRs on cards consumers roll onto after the promotional period have also climbed sharply, reaching 28.8 percent in April to June 2025, Fairer Finance said.

Those changes reduce the time and margin consumers have to clear transferred debts without paying interest and increase the stakes if balances remain after the promotional period. Most balance transfer offers are risk‑based: Fairer Finance said 59 of 73 deals in its survey vary terms such as the transfer fee and promotional period depending on the borrower’s credit check, meaning the headline offer is not guaranteed for all applicants.

James Daley, head of research at Fairer Finance, said zero‑percent cards have been a useful tool for managing debt but warned that the best deals are now harder to find. He advised consumers to shop around, be cautious that advertised terms may change after a credit check, and to have a clear plan to pay balances before promotional periods end.

Lenders have moved on both ends of the product. In several cases the promotional window has been shortened while transfer fees have risen. Fairer Finance highlighted First Direct as an example: the bank’s balance transfer promotional period has reduced from 27 months to 20 months in recent years while its transfer fee rose by 0.7 percentage points.

There remain a handful of relatively competitive offers. Tesco Bank is cited by Fairer Finance as offering an 18‑month 0 percent balance transfer period with a 0.99 percent transfer fee and a representative APR of 24.9 percent. Virgin Money markets a 20‑month interest‑free deal with a 2 percent transfer fee and a 24.9 percent representative APR, and also has a 30‑month balance transfer product available with a 2.45 percent transfer fee and the same representative APR. Some mainstream banks, including NatWest and Santander, are offering fee‑free balance transfers but those typically carry shorter promotional windows of about 12 months.

The trend comes despite three Bank of England base rate cuts during 2025. Fairer Finance noted the contrast between falling policy rates and rising standard representative APRs on credit cards, which determine the cost borrowers face once promotional periods expire. Representative APRs shown in product tables reflect the typical rate a lender offers and can be influenced by market pricing, operational costs, and the risk profiles of customers granted credit.

For consumers, the changes tighten the window for paying down transferred debt without incurring interest and raise the potential cost if repayment takes longer than expected. Balance transfers usually incur a one‑off fee applied at the time of transfer; if a borrower fails to clear the balance within the promotional span they are typically transferred to the card’s standard APR, where interest compounds on any remaining balance.

Fairer Finance’s analysis is based on a review of market offers and representative product data. The group’s research underscores that advertised headline deals may not be available to all applicants and that small differences in fees and promotional length can materially affect the cost of carrying and repaying debt.

Daley urged consumers considering a balance transfer to check the fee and promotional duration they will be offered after a credit check and to model repayments to ensure the debt will be cleared before the offer expires. "There are still some good offers out there," he said, "but customers need to have a clear plan how they are going to clear their debt by the end of the offer period — as regular credit interest rates are a very expensive way to borrow."

Banks and card issuers have not universally published explanations for the shift in product terms beyond general comments about risk‑based pricing and market repricing. Industry observers say firms adjust promotional lengths, fees and representative APRs in response to competitive pressures, the cost of funding, and the credit risk of applicants. Consumers remain able to reduce the cost of unsecured debt by consolidating balances onto promotional deals, but Fairer Finance’s findings suggest the relative advantage of balance transfers has narrowed and requires closer scrutiny by borrowers.