Changes in UK credit card market

Peter Harrison, credit card expert, said: "Following the Government's Credit Card Consultation process, we have already begun to see changes within the credit card market.

"Today we have seen Virgin reduce the length of its market leading balance transfer offer from 16 months to 14 months, which now makes Barclaycard the best credit card for balance transfers in the UK offering zero per cent for 15 months -  it will be interesting to see how long they will maintain this. The Virgin Credit Card has been a market leading product for balance transfers for many years, so this move shows how the industry is responding to the regulation which is being introduced. Ultimately it is consumers who will be losing out as lenders reduce their zero per cent offers in response. I would expect further changes in promotional offers over the coming weeks.

"In a separate move, MBNA has announced that it is stopping issuing all credit card cheques from the end of March. Unsolicited credit card cheques have long been a source of annoyance to many customers and are due to be banned as part of the Financial Service Bill when it comes into force later this year. MBNA is the biggest issuer of credit card cheques in the UK, and they should be commended for banning them completely. This move surely spells the death knell for the credit card cheques ahead of the regulation being introduced. This is good news for borrowers, as credit card cheques never afforded protection under Section 75 of the Consumer Credit Act, which consumers are used to on normal credit card transactions.

"These changes in the market show how credit card providers are responding to regulation, so consumers need to keep an eye on changes as we have already seen the best balance transfer deal disappear and I have no doubt other lenders will also move accordingly."