2008 – Time for a new credit card

Posted 2008-01-1

According to new research by MoneyExpert.com 2.6 million Britons will switch credit cards in 2008.  7% of all customers will switch cards, with consumers being urged to take advantage of interest free periods to pay off their debts. Egg and Virgin currently offer the longest interest free periods at 15 months.

Consumers between 15 and 34 are the most likely to switch provider. Geographically 15% of Scottish credit card holders plan to switch compared with 7% in the south-east.

Despite many shopping for the best deal, 6.6 million credit card holders will stay with their credit card provider, paying an average of 16.82%. Sean Gardner of MoneyExpert said:

  “Credit card companies can expect a busy transfer season in January as millions of us wake up to the cost of Christmas before the New Year financial hangover sets in. It is goof to hear people are taking action but worrying that millions will simply add their Christmas debt to their existing debt. Piling on debt is simply adding to the spiral of increasing financial trouble.  People should be taking action to get their debt under control and the first step towards that is to cut borrowing costs.  The next important step is then of course to pay the debt off but transferring a balance is at least a start.”

Some credit card companies are offering 0% rates; however, consumers should be aware of the large balance transfer fees, which at 3% could cost £60 on a £2000 debt.

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