Financial expert Martin Lewis has issued an “important” warning to anyone with existing debt on credit or store cards, urging them to “act sooner”. The warning comes amid predictions that the Bank of England will raise UK-based interest rates, which can affect credit card holders even if their current deal appears unchanged.
Balance transfer deals at risk
In a video shared on Instagram from his podcast, the Money Saving Expert founder said: “This is a warning to anyone who has existing debt on credit or store cards. I’m concerned the deals you can get to cut the cost are about to get worse.”
He continued: “So acting sooner is safer. I’m talking specifically about balance transfers. That’s when you get a new card that pays off debts on your existing card for you, so you owe the new card instead, but at 0% interest.”
What could change
Lewis explained that in an upward rate environment, changes to 0% credit card deals are subtle. “The 0% length may shorten. The fee, the one off fee, you’re charged for doing a balance transfer may increase.”
He added: “The go to APR, the rate you charge once to 0% ends, may also increase. But I suspect the most likely change, and the most difficult to spot, is that fewer people will be accepted for the best deals.”
Eligibility criteria tightening
Lewis warned that lenders are likely to tighten eligibility criteria. “They might still advertise a three year balance transfer, 0% interest free. Sounds great. They’re available at the moment, but suddenly, when you apply, ‘cause it’s an up-to rate, not as many people are gonna get three years, and we’ll get two, so we’ll get one.”
He advised: “So you need to get your skates on. Listen to the full podcast. I’ll go through step by step, how you find the best rate, what the best buys are, cards versus debt, how a balance transfer works in practice, and everything you need to know.”
He concluded: “Because the less interest you’re paying, the more of your money clears the actual debt itself.”
