Credit card balance transfers 'better than loans' - 30/01/2008

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Cheaper funding could be available through credit card balance transfers than loans, according to one price comparison website.

EveryInvestor claims that rate increases by personal loan providers have made credit card balance transfers a savvier option than borrowing lump sums.

A consumer wishing to borrow £10,000 could save £1,054 over four years by choosing a succession of zero per cent credit card balance transfer deals instead of a loan, the site maintains.

Chris Gilchrist, editor of the site, explains: "Lenders have raised personal loan rates sharply in the past six months, making most loans significantly more expensive."

Credit card providers, on the other hand, are still offering long zero per cent balance transfer deals, with fees working out to cost less than the interest on personal loans.

Although predictions that zero per cent balance transfer deals will end have surrounded the market in recent months, the editor claims to "see no reason" why the need to remain competitive will not persuade providers to continue offering such incentives.

Nici Audhlam-Gardiner, head of mortgages at Abbey, has this week claimed that January is the ideal time to think about getting out of debt and streamlining finances.

© Adfero

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