Balance transfers allow part or all of a card’s debit balance or debt to be transferred from one card to another.
According to Which?, 21 per cent of people who took out a new credit card over the past two years did so to make a balance transfer. However, most were unable to calculate the charges they would have to pay.
Customers pay around £334m in balance transfer fees a year, but 68 per cent of people interviewed thought balance transfers were free.
Which? also asked people to pick the card with the best balance transfer deal.
Only a third could identify the cheapest card while another third actually chose the card with the highest balance transfer fees: £123 compared with £33.
Which? executive director, Richard Lloyd, said: “Too many credit card deals appear to include sneaky fees to catch customers out. We want the FCA to scrutinise balance transfer deals and make it easier for people to understand.”