Zero-interest credit card deals could go
‘Switching credit card providers to take advantage of interest-free introductory deals, a boon for many in debt, could be on the way out after research found the practice costs the industry billions.
Professor Merlin Stone of the Bristol Business School said on Tuesday some issuers will not be able to sustain the estimated 80 million pounds that switching costs the industry each month.
Over eight million people have moved outstanding credit balances to other cards, according to card company Capital One, which also commissioned the study from Stone.
“Economically, some providers cannot sustain their current offers of zero percent interest which means they may have to remove them or start introducing new charges to help reduce their costs,” Stone said in his report.
Britons owe almost 60 billion pounds on credit cards after a consumer boom boosted lending to 144 billion last year from 97 billion in 2000, according to Bank of England figures.’
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