UK banks are expecting higher demand for credit card borrowing in the next few months, according to Bank of England. Since the Brexit referendum in 2016, consumers have helped uplift the UK economy forcing companies to reduce their investment.
The Bank of England’s prediction for credit card borrowing by households has increased to 14.3 percent over the next three months. According to a Bank of England survey, demand for borrowing by companies dropped in the fourth quarter of last year. A measly growth for small enterprises was expected in the first quarter of 2020, unlike large companies.
The Bank of England conducted the survey between November 25 and December 25 last year. The survey also showed that banks’ demand for mortgages fell in the fourth quarter. The demand is expected to fall again in the first quarter of 2020.
Rachel Springall, a finance expert at Moneyfacts, told the media that, “Those consumers who used a credit card to pay for some of the festive season may be looking to acquire a zero percent balance transfer card, but if they do then they would be wise to make fixed repayments.”
Currently, there are 76 balance transfer deals available, compared to 122 deals in January 2017. Also, the longest interest-free period has dipped to 29 months from 43 months, The Independent reported.
The Financial Conduct Authority had necessitated credit card companies to help customers repay balances more efficiently. Experts suggest that if customers are unable to get a long zero percent introductory period, then they can consider cards offering interest-free for less than six months.