During the three months between July and the end of September, there were 34 credit card providers – the lowest number since Moneyfacts began recording this data in 2006.
In that time, the number of interest-purchase offers (58) stayed the same as the previous three-month period, while interest-free balance offers dipped to 58 from 60.
The number of unsecured personal loan providers slipped to 25, which is the lowest number since April 2012.
It follows the same trajectory as the beginning of the year, when several major providers including The AA, Bank of Ireland UK and Post Office Money left the unsecured loan market.
This time, Sainsbury’s Bank left the loan market, while Metro Bank stopped providing credit cards to customers.
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In the third quarter of the financial year, the average purchase APR, including fees, rose to 35.5% – the highest rate it has been since records began in 2006. This was attributed in the UK Unsecured Lending Trends Treasury Report to a mix of card withdrawals and launches.
The rates for balance transfer fees stayed at the same level as the previous quarter, at 2.42%.
Borrowers also face a shorter amount of time to receive interest-free purchases on credit cards, with the average term falling from 264 days to 253 days in June.
Choice of offers for borrowers narrowed
Rachel Springall, finance expert at Moneyfacts, said: “The market for unsecured lending across credit cards and loans noted a contraction in the number of providers during Q3 2024, which has subsequently narrowed the choice of offers for borrowers.”
Springall added: “Those borrowers searching for an introductory 0% credit card deal may be disappointed to see both the average terms for purchases and balance transfers reduced during Q3 2024.
“These deals would typically become more popular as we approach the festive season for those looking to spread the cost of their purchases, or indeed shift an existing debt to an interest-free balance transfer offer to give themselves more time to pay it off.
“Borrowers who are looking for a new balance transfer offer would be wise to watch out for transfer fees, while these have not risen over the last quarter, at 2.42%, it is higher year-on-year, up from 2.29%. However, borrowers can still find 0% balance transfer offers that do not charge a transfer fee, but they will usually have a much shorter interest-free term.”
