A lifetime balance transfer deal may work out cheaper than taking out a personal loan to pay off debt, according to a financial advisor.

The market has been flooded with credit card companies offering customers balance transfer deals at nought per cent but they are starting to disappear as lenders wise-up.

Lisa Taylor from Moneyfacts.co.uk explained how providers are resorting to alternative methods to recoup their losses by "adding fees to balance transfer deals, uncapping balance transfer fees, withdrawing incentives and shortening introductory rates".

However, Moneyfacts research shows this could still be a better option to taking out a personal loan to pay off debt with some credit card company rates 0.7 per cent lower than a 'best buy' personal loan rate.

For example, a low rate personal loan from Direct Line would be charged at a rate of 5.6 per cent a year (for £5,000 over three years) whereas a balance transfer to American Express would have an interest rate of just 4.9 per cent.

Intelligent Finance Visa, Airmiles, Morgan Stanley, Nectar and Sainsbury's also offer an interest rate under six per cent for a balance transfer for life.

She added: "Although the lifetime balance transfer rates can be cheaper, it does require the consumer to be strict, making fixed repayments on a similar basis as a loan to make any benefit from the lower rates."