Credit Card Market 'Competitive'

Competition among Britain's credit card providers is hotting up - and consumers are feeling the benefits, the Times reports.

Fee-free deals, longer zero per cent periods and other offers are all being publicised by firms in a bid to capture custom. At the forefront is the Capital One Platinum Card offering zero per cent on both purchases and balance transfers for a full 15 months. Virgin Money also offers a 15 month balance transfer deal, along with zero per cent on purchases for three months.

The continuing effects on the credit crunch have been cited by experts as a cause of this trend, with banks who are having trouble raising money on the wholesale markets as a result of the crisis now looking for other ways to raise revenue.

The credit card market, in which customers can be charged APRs exceeding 15 per cent when the zero per cent introductory offer periods run out, is therefore attractive to these firms.

Personal loans rates and mortgage rates, by contrast, have risen as a result of the credit crunch - pointing to the fact that they offer less reliable revenue streams than the card sector.