Credit card borrowers looking to transfer debt to take advantage of lower interest charges elsewhere should brace themselves for rising transfer fees.
Those with big debts are being advised to move fast to secure a good deal.
Experts forecast that average transfer fees could rise from 3% to 5% next year. The rise is inevitable as card companies look to fill a hole in their revenues, resulting from new rules designed to make their offers more transparent.
From next January, card issuers will no longer be able to insist that customers pay off their cheapest debts first, before clearing more expensive ones. At present, this causes problems for borrowers who move existing debts to 0% balance transfer cards, but then spend on the same card. New purchases are then charged at a higher interest rate and the interest continues to roll up until the borrower has paid off their balance transfer debt at the lower rate.
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