End of 0% cards imminent?

IN_LIKE_EVERYONE_ELSE!

Can anyone guess what will happen if 0% credit is ended? I have noticed a tightening of lending criteria.
Is it a position the credit card companies are railroading us into?
What do you think?

Sleep soundly!

mountainofdebt

Personally I think that its not a case of ending 0% per se but the lenders tightening the availability of credit.

In fairness to them, how many of us would be in the state that we're in had credit card companies said no earlier? By that I am in no way blamng the companies for my amount of debt...I (or should that be we?) spent it and we will (eventually!) pay it back..

(I think they are also tightening the availability of more credit in the form of higher limits as I have been turned down twice now with my existing cards...not to increase my debt you understand but to shuffle it around abit!)

YorkshireBoy

My view is that 0% will stay - at least whilst interest rates in general remain low.

As to credit limits, I've personally seen no signs of a reduction. In fact, I'd go as far as to say there is still some irresponsible lending taking place. As a stoozer, I'm not complaining, but for people who, for various reasons, can't manage credit properly it's a very bad thing in my opinion.

I posted on the credit card forum this weekend that I thought we'd see more BT fees, higher APR's, & annual fees - but I don't believe any of the major providers will "unilaterally" abolish 0% in the current economic climate.

Just look at Capital One earlier this summer when they commissioned a report which concluded that people didn't want 0% - they wanted LOB deals. What did they do next? They brought out the longest 0% BT deal around.

No, 0% is here to stay for the foreseeable future at least.

JoseChungsDoomsday

i think the Uk credit card market is slowly taking a step backwards compared to the US where most cards have a reward programme and 0%. With MBNA starting to give out annual fees again the rest will jump at the chance to do the same

YorkshireBoy

JoseChungsDoomsday wrote:

i think the Uk credit card market is slowly taking a step backwards compared to the US where most cards have a reward programme and 0%. With MBNA starting to give out annual fees again the rest will jump at the chance to do the same

Agreed, but the US interest rates (until the last 12 months or so) have been very low, which obviously helps to preserve 0% deals.

I think you're spot on with the MBNA £15 annual fee. I think it's currently being introduced on the more "obscure" (apologies to West Ham fans) cards, but once it finds it's way onto the Abbey & Virgin cards for example, then this will open the floodgates.

Shiggaddi

i think the Uk credit card market is slowly taking a step backwards compared to the US where most cards have a reward programme and 0%. With MBNA starting to give out annual fees again the rest will jump at the chance to do the same


I have certainly noticed the rewards disappearing over the last few years. Egg heated things up back in 1999, when they introduced 1% cashback, but then cut down to 0.5%, then made it something like 0.1%.

Then Egg start the ball rolling again, by launching a new 1% credit card, but also pays interest if you have a positive balance.

I think in the USA, it's common to have 0% deals but also with a fee but the 0% deals last 12 months. I remember reading that on the fool.

deemy2004

The USA interest rates have gone from 1% to 3.5% and still rising. When they were at 1% the whole world was borrowing and using the money to finance all sorts of gimmicks including 0% credit cards IN the UK...

That game is now over... So I think the 0% deals will continue to die out and be replaced with the low balance transfer deals such as 1.9%, 3.9% etc... with the balance transfer fees of 2%.

IN_LIKE_EVERYONE_ELSE!

Even with low balance transfers more money will need to be found, a tricky subject to get your head round and I am certainly no expert.

Thefunkygibbons

The CC market is very competitive and the card companies know that it is the best way of getting new customers currently and whilst one does it, they all have too

I expect them to continue for the time being

YorkshireBoy

Nationwide have just stopped giving 0% on BT's for their Classic & Gold cards. They now give 4.9% on BT's for 12 months, but have extended the 0% on purchases from 6 to 9 months.

It'll be interesting to see if others follow suit. If not, then Nationwide could do a Cap One style "U-turn" and re-introduce the 0% on BT's.

IN_LIKE_EVERYONE_ELSE!

Is that the turning point? They all need to make profits and 0% managed properly by consumers makes no money. They need the likes of us to default or miss a payment or other deadline to start the clawback. Does anyone know how much cash is sloshing around at 0% ??