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Interest-free periods on credit cards offered by lenders are expected to increase as Christmas approaches, according to a survey of banks and building societies.
The Bank of England’s Credit Conditions Survey said lenders reported that the length of interest-free periods on credit cards for both balance transfers and purchases has increased over the past few months, and is expected to increase over the coming three months.
However, there were also fears that credit card defaults would increase over the next few months.
The survey is conducted quarterly as part of the Bank’s role in maintaining financial stability and does not necessarily represent the views of the Bank of England.
The latest survey for the third quarter of this year was conducted in September.
Lenders were asked to report changes in the three months to the end of August compared with the previous three months.
They were also asked about their expectations for the three months to the end of November relative to the three months from June to August.
Lenders said mortgage demand from home buyers has remained unchanged over the past few months and is expected to remain unchanged in the coming three months.
Demand for remortgage has increased over the past few months and is expected to increase over the coming three months.
The report also found that demand for corporate loans from small and large businesses increased slightly, while demand from medium firms remained unchanged over the past few months.
Demand for corporate loans to small, medium and large businesses was expected to increase slightly over the next few months.
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mark harrisThe chief executive of mortgage broker SPF Private Clients said: “Lenders are eager to lend and have the funds available to do so.
“Over the past few months they have relaxed affordability criteria, which has increased the borrowing capacity of many mortgage applicants.”