The Telegraph reported this week that some of the best credit card deals have disappeared from the market over the last 12 months.

Last year, an investigation of the credit card market by the Financial Conduct Authority concluded that banks should encourage more customers to pay back debts as quickly as possible.

One consequence of this intervention appears to be the disappearance of the longest interest-free credit card deals.

Data from credit card comparison site Moneyfacts shows that, in the last year, the interest-free period on the best balance transfer cards has shrunk from 37-months to 32 months.

While this may encourage more customer to repay debts faster, it could also increase the overall cost of borrowing, because some customers will have to pay transaction fees more often.

In the current balance transfer card market, the Post Office Money card has one of the longest interest-free periods of 32 months. But the lender charges a 2% fee on the total balance that’s shifted from another provider.

This means that a customer with a £3,000 balance on one card would need to pay a £60 fee to access the interest-free period.

Some card providers offer to move existing balances without a fee, but the interest-free terms are usually less favourable.

Tom Fox, Licensed Insolvency Practitioner with Umbrella Insolvency said: “Interest-free balance transfer credit cards can be effective for people that are struggling to repay debts.

“If they are struggling to repay credit card debt, then transferring the balance and unlocking an interest-free period can be an attractive proposition, providing their credit score is good enough.

“Shorter interest-free periods on balance transfer credit cards will mean that some people will have to shift balances more often and could result in them paying more in fees and less servicing their debt.

“In some ways, the restricted lending is a symptom of the slowing economy. The UK had the slowest quarter of growth since 2012 in the last three months of 2018. Further instability in 2019 could cause consumer credit to dry up even faster.

“If this happens, then we expect to see more people struggling without a credit lifeline to help them get out of short-term trouble.”

For more information on personal insolvency services, please speak to a member of the team today. Call: 0800 611 8888.