uSwitch: Amex move could signal end of rate tart phenomenon

June 15, 2006

By Peter Kenny

Financial advice and comparison website uSwitch has today said that American Express' (Amex) recent move to withdraw its balance transfer facility for new customers could signal the end of the 'rate tart' phenomenon.

The phrase 'rate tart' was coined to describe the breed of credit card borrower who continually switches from card to card in order to take advantage of zero per cent balance transfer offers.

Two of the balance transfer offers that the credit card provider is withdrawing are its Nectar Amex and Blue Amex life of balance offers.

Nick White, head of personal finance at uSwitch, suggests that Amex's move may have been prompted by the recent OFT announcement forcing credit card suppliers to reduce their default charges.

He adds, however, that this development has "been a long time coming", irrespective of the OFT directive.

Mr White adds: "While consumers shouldn't start panicking just yet – there are still over 40 life of balance deals available at the moment… there has been a fall in the number of zero per cent deals on the market, along with a tightening of the lending criteria by most major issuers."

According to uSwitch, Amex will now be focusing on the reward schemes it offers its customers, although it says that how successful this strategy will be "remains to be seen".