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Fewer balance transfer deals 'will have knock-on effect'
17 April 2008
A reduction in the availability of credit due to current economic turmoil could have a knock-on effect on other finances.
A debt expert has warned that while consumers previously found that balance transfer deals were readily available, the credit crunch has seen lenders be more cautious with their offerings.
A spokesperson for National Debtline said that cheap interest-free balance transfers "are going to be very hard to come by, if not non-existent" in the future.
Beccy Boden-Wilks said this is likely to have an impact on other personal finances such as mortgages as the lack of funds may see people unable to keep up with repayments.
"One of the major effects of the credit crunch is that people can't manage their large amount of debt as cheaply as they could before - this is having a knock-on effect, which is why at National Debtline we're seeing increases in mortgage arrears.
"If people can't afford their non-priority debts anymore sometimes they'll stop paying their mortgage as well. It's definitely having a knock-on effect."
He added, however: "There are some reasonably good deals you can get if you've got a squeaky clean credit rating."
