Research by credit experts TotallyMoney and MoneyComms warns that lenders are putting the squeeze on introductory 0% interest cards for balance transfers. Consumers looking to take charge of their debt in the new year may struggle to find a deal that lasts long enough to clear their debt interest-free.

The maximum term for interest-free transfers has been slashed 32.6% in just two years, from 43 months (Jan 2017) to just 29 months (Nov 2019).
An average drop from 25 months of 0% interest (Jan 2017) to just 17.9 months (Nov 2019) – down 28.4%.
January is the busiest month for balance transfers. Last January, consumers made 701,000 transfers, worth £1.541 bn.
0% balance transfers continue to outweigh the transfer fee, with the average consumer transferring £2,200.* They would ‘earn back’ a one-off fee of 3% (£66) in just seven weeks† of zero interest rather than paying 19.9% APR.

The research shows lenders are shrinking the balance transfer honeymoon period, after which the enticing 0% interest rate disappears and a much higher rate kicks in.

It suggests lenders are eager to recoup their money in less time, but that leaves consumers at risk. If they don’t pay off their debt by the deadline, they could incur punishing interest rates that trap them in a cycle of debt.

Resolution solution

Customers seeking the best 0% deal to ring in 2020 should move fast — before lenders cut the honeymoon period even further.

Every January, consumers resolve to take control of their finances. In January of the last three years, consumers made over 700,000 balance transfer deals, adding up to over £1.5bn.

Whether they’re tightening their belts after Christmas spending or simply trying to regain control of their finances, 0% offers can help, if used sensibly.

Time is money

Despite one-off fees and fewer months at the 0% rate, balance transfers are still worth considering. The average consumer would save the cost of their transfer fee in just over seven weeks† of not paying 19.9% APR — and still enjoy months of additional savings from zero interest charges.

However, despite today’s average term of 17.9 months with zero interest being tempting, it is significantly lower than before.

Just two years ago, credit card companies granted up to 43 interest-free months, but today’s maximum is just 29 months. That could mean 15 extra months of paying interest, a cost of £621.87†.

Pressure cooker

With fewer months at the 0% rate, consumers now have less time to pay off debt without penalty.

The stress of rising debt is only part of the problem. Many people rely on 0% borrowing just to stay afloat. The reduction in 0% deal terms could be a ticking time bomb for some consumers.

Even though the 0% market is less attractive as interest-free periods shrink, there is no let-up in demand, with over half a million transactions each month, valued around £1.2 billion.*

Alastair Douglas, CEO of credit experts TotallyMoney, comments: “Many consumers act decisively to take control of their finances as the new year begins. Transferring their balance to a 0% card can help them ‘catch up’, giving them time to pay off their balance without spiralling interest charges.

“This year, with lenders squeezing the number of months they offer a 0% introductory rate, customers will be under pressure to pay off their debt more quickly. They need to be even more savvy about finding the right deal, to get the maximum breathing space, free from interest charges.

“Those looking to get a balance transfer card should start by checking their eligibility. They will learn how likely they are to be accepted, and prevent damage to their credit rating as a result of being rejected.

“At TotallyMoney, we’re on a mission to improve the UK’s credit score. Checking your free credit report is the first step towards making sure your score is as good as it can be. With this, you’re much more likely to get better balance transfer offers, helping you get on top of your debt and move on up to a better financial future.”

5 balance transfer tips to save you money

1. Check your eligibility
Get a free credit report and discover your Borrowing Power. You’ll see how likely you are to be accepted for balance transfer cards, saving time and avoiding a knock to your credit score from being turned down.

2. Never miss a payment
Set up a direct debit to avoid negative consequences such as penalty fees or credit score damage. Missed payments could even make your 0% interest rate disappear. You’d have to start paying interest immediately on the remaining balance, probably at an uncompetitive rate.

3. Don’t spend or make cash withdrawals

Don’t be tempted to use this card to buy anything. The 0% deal is only valid on the balance moved. All new purchases will be charged interest — and the rates tend to be quite high.

4. Never outstay your welcome
Clear your debt before the 0% interest deal ends, or move it to new balance transfer card. Otherwise, your remaining balance will start to incur interest charges, often at a high rate.

5. Check transfer limits
You can usually move debts from multiple cards onto a single balance transfer card. The amount you transfer must be within the credit limit on your new card, minus the fee. Typically, you can transfer up to 95% of your credit limit. Weigh up how much debt you need to pay versus the credit limit you are likely to be offered.

23 Dec 2019 A record-breaking number of transactions are being processed in the run up to Christmas as shoppers rush to finish last minute shopping. Since Black Friday, NatWest customers have spent £11,816million. This is coupled with a record number of fraud attempts, with NatWest flagging and preventing 39,181 fraudulent transactions, preventing debit and credit customers from losing over £11.64million.

Over the Christmas shopping period from 29 November to 19 December, just under 310million credit and debit card transactions have been processed. This is an increase on last year which saw 251million transactions over the same period. 

Jason Costain, Head of Fraud, NatWest said: “We’ve just seen one of busiest shopping weekends of the year and we have been working around the clock to keep our customers safe and secure.

At this time of year customers should also be extra vigilant of scams and if a deal looks too good to be true it probably is.”

To help prevent fraud and scams, NatWest recommend following some of the tips below.

  1. If a deal looks too good to be true, it probably is.
  2. Be aware of counterfeits on social media. If the price is far lower than usual and from a retailer you hadn’t previously heard of, it’s likely to be a scam.
  3. Using your credit or debit card to pay offers you significant protection from fraud and poor-quality goods. If you are asked to send money direct to the bank account of the seller, be careful – this could be a fraudster.
  4. A padlock on a website URL means it’s encrypted for payment but still be cautious, goods might not be genuine even though your details are safe.
  5. Be on alert for bad spelling and grammar mistakes or phrases that don’t sound quite right.
  6. Banks never ask for personal or private information over text or email. Delete suspicious messages and report to the bank on a number you can trust.

More information on how to avoid becoming a victim of a scam can be found at by searching security centre.

19 Dec 2019 New research from Charter Savings Bank reveals that parents are collectively spending £2.45 billion on stocking presents for their children this Christmas, with parents splashing out an average £108 on stocking fillers during the festive season.

The growing spending on stocking fillers highlights the enduring importance of the Christmas stocking tradition – just one in nine parents say they have never given stocking presents to their youngest child. Parents say that when they were children one in six didn’t receive stocking presents.

The nationwide study shows one in three parents (34%) intend to keep giving their children Christmas stockings no matter what age they are and around one in 12 (8%) of parents admit they still receive Christmas stockings themselves. However the average age when stockings stop is 15.

The spending going into Christmas stockings is nearly half the amount for main presents as parents budget for around £226 for children on main presents.

Charter Savings Bank’s study shows that first-born children are the winners on Christmas morning compared with their younger siblings. Parents budget for £169 on stocking fillers and main presents for their first-born child and £163 on their second born child.

Men are more generous than women if they are buying the presents – on average they claim they’ll spend £129 on stocking presents and £250 on main presents which at £379 is 26% more than women on £301.

Despite spending £108 already on stocking fillers, a third (31%) of parents plan to spend more this Christmas. The reasons vary – for some it is because their child’s taste has become more expensive as they’ve grown (36%) while for others it is because they themselves have more money at their disposal.

For one in 10 it is because they want their children to think they have been well behaved as they still believe Father Christmas leaves their stocking.

A fifth (19%) of parents, however, are planning to cut back on stockings this Christmas, mainly because their children no longer want them (41%) although for some it is because they have less money (29%). One in seven (15%) want family Christmases to become less materialistic.

Table one: Reasons why parents increase and decrease spending on stocking presents

Parent’ s reasons for increasing spending on stocking presents Percentage who agree with this
As my child(ren) has grown their taste has become more expensive 36%
I have more money at my disposal 31%
I want my child(ren) to have more presents to open 16%
My child(ren) expects both expensive stocking presents and main presents 12%
My child(ren) prefers stockings to their main Christmas present 10%
My child(ren) believes their stocking was delivered by Father Christmas and I want them to think they have been well behaved 10%
Parent’ s reasons  for decreasing spending on stocking presents Percentage who agree with this
My child(ren) no longer wants a Christmas stocking 41%
I have less money now and can no longer afford to spend the same amount of money 29%
I prefer to spend more money on the main Christmas present 19%
I want family Christmases to become less materialistic 15%
I don’t want to have to dip into my savings 8%
I have had more children and have had to cut down on how much I spend per stocking 5%

Christmas can, however, be a time of financial strain for families, with 50% of those who celebrate admitting they have had to dip into their savings. Over a quarter (27%), some 13.1 million, have to take money from their savings every Christmas to be able to afford the festive season. A further 11.4 million (23%) sometimes have to use savings, but not every year.

Paul Whitlock, Executive Director, Charter Savings Bank said: “Opening a stocking is an exciting part of Christmas morning and it seems parents are going above and beyond to provide both stocking fillers and presents under the tree.

“Christmas is an expensive time of year for everyone, especially for parents who seem to be spending more and more on making sure their children have the perfect Christmas.

“Savings are there to be used if needed and it is so important to start saving as much as possible from as early as possible, so you have a safety net when life does become expensive.”

In a bid to find the perfect Christmas present, a quarter of Brits have been victims of fraud when shopping online on websites or online marketplaces they wouldn’t normally use. Whether it’s searching for the next ‘it’ toy, rare sport memorabilia or unusual item of jewellery, people are losing money to fraudsters.

Shoppers have lost an average of £203, but for some the financial hit is bigger with 13% of people left between £300 and £1,000 out of pocket. The average loss is also considerably higher for men, at £255, compared to women, £139. It’s the 25-34-year-old age group which is the most likely to experience fraud at Christmas.

Most people who are targeted by fraudsters find that they receive faulty items, or never receive the item in the first place. Of the unlucky shoppers, only half are able to replace their presents in time for Christmas, while a third (34%) have to buy a different item, and 17% go on to buy a cheaper replacement.

Looking at the items that people buy when they are defrauded, a quarter were shopping for electronics and a fifth bought clothes and toys. Over one in ten victims were defrauded when buying holidays and flights online.

Shieldpay’s patent pending payments process mitigates the risk of online shopping fraud by fully verifying the identity of all parties, holding funds securely and only releasing them once both parties confirm they are happy.

Tom Clementson, Director of Consumer at secure payments solution Shieldpay, said: “The stress and cost of Christmas shopping is enough without the added risk of receiving fake or faulty items. Unwitting shoppers are losing hundreds of pounds, lured into the array of festive offers and knock-off prices and falling straight into the hands of fraudsters. Scammers up the ante at Christmas time, targeting shoppers who find themselves stumbling onto unfamiliar websites. Thanks to the troubling scale of phoney sellers and counterfeit websites, there needs to be better protection for consumers who shop online.

“Banks and retailers have a duty to safeguard their customers, but shoppers can also be on the lookout: requests to pay via bank transfer, spelling errors and fake information are all red flags. Another way to ease the worries of consumers is to utilise technology that secures transactions. That way, money will not be released until both the buyer and seller are happy.” 

16 Dec 2019 The average household now has £38,000 worth of belongings; an increase of almost £3,000 in the last four years, according to analysis from home insurance provider, buzzvault. Total physical wealth – the value of household contents, possessions and valuables owned – for all households in Great Britain has rocketed to £1.3 trillion, up £185 billion in the same time period.

Analysis of the latest ONS Wealth and Assets survey from the home insurance provider reveals the South West has seen the biggest increase in the value of household contents, rising £8,000, or 20%.  Over one in ten (13%) households own ‘collectables or valuables’ such as antiques, artwork or stamps, Around one in six households (15%) own between £50,000 and £75,000 worth of goods.

While challenging economic conditions have caused consumers to approach shopping with caution, higher employment and continued growth in earnings have kept the tills ringing. The ease of online shopping and the ability to receive a new purchase at home within hours of clicking the ‘buy’ button is also a factor: total online spend in the UK is expected to reach over £75bn by 2023.

Becky Downing, CEO and founder at buzzvault, said: “We have more access than ever to the goods we want. A quick scroll online or stroll on a lunch break can lead to us returning home with potentially hundreds of pounds worth of goods, particularly after payday. However, this makes it all too easy to bump up the overall value of our contents without recognising how exposed this leaves us.

“Having up-to-date insurance is important, but so is having a policy that can be adapted as quickly and easily as buying the products in the first place without having to endure excessive fees. Should the worst happen, and you find yourself the victim of a burglary, the last thing you need is for a claim to be turned down because you’re under-insured and new purchases are not covered. Flexible insurance policies can take minutes to sort, and mean you’re not left significantly out of pocket.”

10 Dec 2019 Seven in ten Brits say they plan to make big cutbacks this Christmas in order to save money, according to new research from AA Financial Services. Overall, three quarters of women are putting plans in place to spend less, whereas only 66% of men have a Christmas budgeting strategy.

With the major retailers launching their Christmas TV ads – and with Black Friday for many signaling the start of a festive spending spree – the new survey from AA Financial Services finds more households are making budget cuts to keep the cost of Christmas under control than this time five years ago (71% in 2019 Vs 56% in 2015). For the 2,000 people surveyed, the top three money-saving plans for Christmas 2019 are to:

  • put a strict limit on how much per head will be spent on presents for family members (33%);
  •  cut down spending on non-essentials such as Christmas decorations and homely treats (25%);
  • knock Christmas cards on the head (14%). In the age of social media and Facetime, the tradition of physical cards is losing its allure.

Women lead the savings charge     

The research also found women are more proactive than men when it comes to doing Christmas on a budget and will be stricter when deciding what goes into the shopping basket.  Nearly a third of women say they are reining in spend on Christmas decorations and treats in a bid to keep costs down (29% Vs 21% of men).As well as setting a strict limit on present spending (40% women Vs. 26% men), women were more likely to:

  • buy things second-hand at the charity shops or at car boot sales (11% Vs. 6% of men);
  • ask guests to contribute food or drink over the Christmas period (8% women Vs. men 5%).

18-24’s trim back their Christmas costs

With the new John Lewis Advert depicting a baby dragon bringing a Christmas pudding to a festive gathering, the AA research also found that 18-24-year-olds were twice as likely to ask guests bring food or drink with them to contribute on Christmas Day (15% Vs. national average 7%). They were also the most likely to say that they wouldn’t be sending Christmas cards this year (20% Vs. 14%).

Warren D’Souza, Head of Insight at AA Financial services commented: “Recent news that UK retail sales have been hit by a surprise downturn despite big discounting could be the start of a trend this Christmas. Our research shows that millions of households are approaching the Christmas period keen to keep their spending firmly under control.

“Brexit and the General Election may both be factors at play here given the context of economic uncertainty. Our research tells us that many Brits already have clear financial resolutions in place to save more money in 2020 and to review or consolidate their borrowing.

“With financial health in terms of streamlining savings and personal loans a top priority for the New Year, it is understandable why so many people what to finish this year with a budgeted Christmas – one that celebrates a good time with family and loved ones but does give a financial hangover to take into the New Year.”

04 Dec 2019 The first biometric fingerprint payment fob issued by a UK bank begins a three-month national trial today (4 December 2019). NatWest is piloting the cutting-edge, biometric fingerprint technology with 250 customers.

The bank has previously piloted biometric cards, but this will be the first-time payments have been made possible over £30 without a bank card or mobile phone.

The biometric fobs will offer contactless payments using fingerprint verification for transactions up to £100, an increase on the current £30 limit. The fob is no bigger than a standard keyring and features a small fingerprint reader.

No hardware changes are needed to accept biometric fobs at the point of sale, so customers can use the fobs at existing contactless and Chip and PIN terminals. When a customer presents a fob, a light indicates that the fingerprint has been matched successfully.

Enrolment is simple and takes as little as five minutes. A customer registers the fob in the comfort of their own home using their mobile phone. If a fob was lost, it would not be possible for someone else to use it for contactless transactions and for extra piece of mind the fob can be blocked using the mobile app. Biometric data is never shared with the merchant or the bank and is encrypted on the device.

David Crawford, Head of NatWest Effortless Payments, said: “After the successful pilot of our biometric debit card we are looking at how we can further develop the technology and push the boundaries to integrate it into our customers everyday lives.”

NatWest is working closely with Visa and Giesecke+Devrient Mobile Security to bring the service to customers in the UK.

Jeni Mundy, Managing Director, UK & Ireland, Visa, said: “Following the launch of the UK’s first biometric debit card earlier this year, we are again pleased to collaborate with NatWest on this pilot. Our research tells us that people have a strong interest in biometric technologies which can make their lives easier as well as increasing the security of their payments. At Visa we are constantly looking for ways to innovate with our partners to give consumers greater choices in how they pay.”

Axel Lange, Managing Director Giesecke+Devrient Mobile Security GB Ltd, said: “With the changing requirements in payment Authentication, G+D Mobile Security welcomes the opportunity to pilot different ways to pay and we see biometrics as a key enabler to do secure and yet convenient payments.”

03 Dec 2019 Research from auto-switching energy service, Migrate found that energy suppliers are charging customers an average of £87 a year to pay on receipt of a quarterly bill rather than pay monthly via direct debit.

The largest difference between payment options comes from Utility Warehouse, who charge customers £93 a year to pay on receipt of a bill. All ‘Big 6’ suppliers charge PORB customers £86 a year more than those who pay by monthly direct debit.

Customers that choose to pay on receipt of bill will be sent a quarterly bill for the energy that they have used, and will usually have the option to pay online, by phone or by cash or cheque.

Many people, particularly older people, prefer the discipline of receiving a quarterly bill and having the option to pay by cash or cheque to help them manage their budget. And while suppliers typically offer a discount for prompt payment, those who chose this payment method will likely still pay more for their energy than those who pay via direct debit.

While energy customers save an average of £315 a year by migrating their supplier with auto-switching service Migrate, research from the ONS found that 2.6 million people over the age of 75 didn’t use the internet at all in 2018. Meaning that those who are most likely to be paying a premium to pay on receipt of a quarterly bill are also the people least empowered to do anything about it.

26 Nov 2018 Paragon Bank has introduced new competition to the Lifetime ISA market, launching a Cash Lifetime ISA (LISA).

The Lifetime ISA currently pays 1.15% and can be opened between the ages of 18 and 39, allowing customers to save up to £4,000 a year tax-free and receive a 25% government bonus until they turn 50.

If they are willing to lock their cash up for longer, savers can earn more, as funds cannot be withdrawn without being subject to a 25% government charge, unless they are to be used for the purchase of a first home or for retirement.

If used for retirement, the funds can be withdrawn free of charge once the account holder reaches the age of 60, however the savings will stop earning the 25% government bonus and cannot be added to once the account holder turns 50.

Derek Sprawling, Savings Director at Paragon said: “The Lifetime ISA is a fantastic opportunity for savers to earn a considerable amount of money on their savings towards their first home or retirement.

“If you save the maximum amount into a LISA every year between 18 and 50, you will have earned a £32,000 government bonus alone.

“The imminent end of the Help to Buy ISA should increase the appeal of the Lifetime ISA scheme.”

Further information on Paragon Bank’s Lifetime ISA can be found here.

25 Nov 2019 Credit experts TotallyMoney reveal their top 10 tips for customers to keep their purchases protected under Section 75 of the Consumer Credit Act ahead of the season’s busiest shopping period. The experts say:

  • Section 75 of the Consumer Credit Act protects credit card purchases from £100 to £30,000
  • Section 75 gives people extra protection on faulty goods, items that never arrive, and services never fulfilled, including when companies go out of business
  • Nearly 1 in 3 people (29%) don’t realise they’re covered at all, according to a TotallyMoney survey
  • Shoppers forecast to spend £7 billion across Black Friday and Cyber Monday
  • 62% of adults plan to take advantage of Black Friday and Cyber Monday deals

Section 75 of the Consumer Credit Act means credit card companies and retailers are jointly and severally liable when a product or service isn’t delivered. With 62% of adults planning on making a purchase over this hectic shopping period, the extra protection afforded to credit card purchases could prove invaluable in recouping losses should retailers renege on their promises.

TotallMoney says that Section 75 claims should be honoured providing the Debtor Supplier Chain isn’t broken. This means the exchange of money between customers, the credit card company, and the service provider must be maintained. Transactions through third-party sites such as PayPal would therefore not be covered.

Customers left in the dark

The credit experts are keen to spread the word about Section 75, following a OnePoll survey of 2,000 UK adults commissioned by TotallyMoney that revealed nearly a third of adults don’t realise such protection exists.

In light of the research, TotallyMoney has put together 10 tips on what Section 75 is and what shoppers need to do to make a claim.

TotallyMoney also warns that while Section 75 does provide extra protection, shoppers still need to use their credit card responsibly — especially when shopping online.

They advise only spending what you can afford, paying off the full credit card balance using the money saved in your bank account for such spending, and only buying from reputable sites that have the padlock symbol in the web browser, to show the site is secure.

Alastair Douglas, CEO of credit experts TotallyMoney, comments:

“In the lead-up to Christmas, it’s only natural for people to spend a bit more than usual, which is why it’s so important for customers to make sure they protect themselves as much as possible during this busy shopping period.

“With more and more of us poised to snap up bargains online, the potential for fraud is greater than ever. At this time of year, there’s nothing worse than your goods not turning up or being charged for something you didn’t buy, and being left out of pocket as a result. Section 75 gives consumers an extra level of security.

“Section 75 doesn’t mean you can be care-free with your credit card spending, though. You should only buy what you can afford and use the money left in your bank account to pay off your full balance.

“At TotallyMoney, we’re on a mission to improve the UK’s credit score. Checking your free report is the first step towards making sure your score doesn’t suffer at the hands of fraud. With this, customers can easily make sure everything is as it should be — helping them move towards a better financial future.”

Top 10 Section 75 tips

1. Limits on claims

Individual items and purchases costing more than £100 and up to £30,000 are covered under Section 75. So, whether it’s a pair of £100 shoes that fall apart on the first wear, or a swanky new £20k car that comes complete with faults, as long as you paid on credit card you could be reimbursed the full amount.

2. We’re talking credit, not debit

Section 75 doesn’t cover anything bought using a debit card. Chargeback protection is as good as you’ll get with debit.

3. They’re bust. You’re not broke

Buying from a company that goes bust before they deliver, doesn’t mean your money’s lost. Section 75 requires credit card companies to get your money back.

4. Pay a deposit, get full value cover

When a deposit for goods or services is required, use a credit card — even when the deposit is less than £100. Should anything prevent you from settling the balance (like the company goes bust or the seller vanishes), Section 75 lets you claim the full amount. Not just the paid deposit.

5. Pay part credit and part cheque, get full value cover

The same goes if you decide to pay part of the balance by credit card and the rest by cheque. Consumers can reclaim the full value of the qualifying goods and services even if the total balance wasn’t paid using credit card.

6. Stay protected on closed cards

Say you buy an item, close the credit card you bought it with, but something goes wrong with the qualifying goods or services, Section 75 means you can still make a claim.

7. Extra expense cover

If you book a holiday and the flight is cancelled, through Section 75 you could claim back additional accommodation and food expenses, providing those consequential losses were reasonable.

8. The Section 75 loopholes

Buying through a third party (like online marketplaces or travel agents), additional cardholder purchases, or cash that’s withdrawn from your credit card account won’t offer Section 75 protection. You need to have paid the company directly (so purchases made through PayPal, for example, aren’t covered).

9. Section 75 applies to all credit cards

When it comes to Section 75 there’s not one rule for one credit card company and something different for another. All credit cards come with Section 75 benefits.

10. The claim process

First port of call: the retailer you bought the goods or services from. Failing that, go to the credit card company — this might be your bank or building society, not Visa, Mastercard or AMEX. They’ll get you to fill out a claim form and voila! Your money is back where it belongs.