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Lloyds Reduces Interest-Free Credit Card Terms

Lloyds Banking Group has reduced the length of some of its zero per cent credit card balance transfer deals following a crackdown by the Bank of England.

The move comes after the Bank of England spoke out about lengthening zero per cent terms on credit cards, and it is the first sign that high street banks are responding to the regulating bank.

Lloyds had offered a card with 43 months interest free through the Halifax earlier in the year, which was a market leading rate, but this has now been shortened to 38 months.

MBNA, which Lloyds Banking Group recently took over, currently offer a 39-month interest-free term, but this had also previously been longer at 41 months.

The Bank of England had voiced concern that interest-free periods on credit cards had more than doubled over the last four years, and was possibly helping to push the UK boom in consumer credit.

Lloyds chief executive Antonio Horta-Osorio had previously stated that the consumer credit boom should not be blamed on the high street banks.

He said last month: ‘If you look at the Bank of England numbers in terms of consumer debt and you compare them to the BBA [British Banking Association] numbers which have the major banks, you see that the growth in consumer finance according to the Bank of England is much stronger than the BBA numbers. I think most of the growth in consumer finance is being done in sub-prime or near-prime segments which we don?t participate in.?

Lloyds Banking Group are second only to Barclaycard in the UK credit card market with a 26 per cent market share.

A spokesman for the bank said: ‘We believe we remain competitive.?

It remains to be seen if the other major high street banks will follow by reducing their own interest-free credit card terms.

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