Borrowers can save hundreds of pounds in interest charges and become debt-free faster by transferring their credit card balance to a 0% interest offer, according to a new report from Moneyfactsgroup.co.uk. The UK Unsecured Lending Trends Treasury Report reveals that the average purchase APR on credit cards has reached a record high of 36.0%, the highest level in two decades since electronic records began in June 2006. The average purchase per annum (PA) rate also rose to a record 26.878%, while the average cash PA rate (cash advance) climbed to 30.544%.
How to Save Nearly £700 in Interest
Rachel Springall, finance expert at Moneyfacts, explained that failing to take advantage of 0% offers and only making minimum payments can result in unnecessary high costs. She gave an example: a £2,000 debt on a card charging 36.0% APR would take two years to pay off if the borrower repaid a fixed £115 each month, costing almost £700 in interest. However, moving that debt to a 0% balance transfer card and making £150 monthly payments would clear it in just over 12 months.
Fee-Free Balance Transfer Deals Available
Springall noted that some cards currently offer fee-free balance transfers, including a 13-month 0% deal from Barclaycard, 12-month offers from Virgin Money and Santander, and 11 months from NatWest and RBS. She emphasized that this is particularly significant given that UK Finance data from March 2026 shows 48% of credit card debt incurred interest. She urged borrowers to prioritize paying off debts quickly, whether large or small.
Watch Out for 0% Expiry Dates
It is crucial to keep track of how long the 0% rate lasts to avoid suddenly being hit with much higher rates when the promotional period ends. The report also highlighted that the average length of a 0% balance transfer deal has risen to 605 days, a four-year high, while the upfront cost to transfer debt has dropped to 2.48%, its lowest in over a year. For purchases, the average 0% purchase term is now 303 days, also a four-year high.
Credit Card Benefits Under Section 75
Springall added that credit cards remain a great option for everyday purchases or larger items, as goods or services valued over £100 and up to £30,000 are covered under Section 75 of the Consumer Credit Act if not received. The report underscores that competition on introductory interest-free card offers has intensified, helping to defuse what Springall called a 'glaring debt time bomb' facing households.
