The number of providers within the credit card market fell to a record low 34 during Q3, new data from Moneyfacts has revealed.

This is the lowest count on Moneyfacts’ electronic records which date back to June 2006.

Over the same period, which covered from the start of June to the start of September this year, the average purchase APR rose to 35.5%, close to the highest level on record seen last month (35.6% in August 2024).

Moneyfacts suggested that a combination of card withdrawals and launches contributed to this change. The average purchase PA rate rose to 25.92% during Q3, which was higher than a year ago.

Finance expert at Moneyfacts, Rachel Springall, 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.

“Sainsbury’s Bank withdrew from the loans and credit card market, and Metro Bank withdrew from the credit card market, which has resulted in the lowest number of credit card providers seen on our records and the lowest count of loan providers seen in over a decade.

“Interest rates are also on the rise for unsecured lending, the average credit card APR and the rates charged on multiple unsecured personal loan tiers rose during Q3 2024.”

Moneyfacts’ latest UK Unsecured Lending Trends Treasury Report also showed that balance transfer fees remained the same at 2.42% during Q3, although this was up from 2.29% a year ago.

The number of interest-free balance transfer offers also fell, from 60 to 58, and there are fewer options for borrowers to choose from than a year ago, down from 63 offers.

Springall added that 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.

She added: “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.”

---