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Borrowers who take advantage of zero interest introductory offers when moving their credit card balances are costing the industry millions, according to a recent report.
Research by Merlin Stone, Bristol Business School, showed that the credit card industry is trying to cope with an £80 million bill due to customer switching providers.
Mr Stone revealed that this was causing lenders to withdraw their interest free offers and introduce charges in order to finance the costs involved.
"Economically, some providers cannot sustain their current offers of zero per cent interest which means they may have to remove them or start introducing new charges to help reduce their losses," said Mr Stone.
Further figures were revealed that showed up to 11 per cent of cards charge for moving balances to a zero per cent account whereas five year ago no cards charged for this.
Although many borrowers took advantage of moving their balances to interest free accounts only 61 per cent managed to clear the amount owed before the introductory period ran out.
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