Debt solutions: Millions of Brits plan to transfer credit card balances

04/01/2010

More than 4.5 million people in the UK are planning to transfer their credit card balances between now and March.

Those adopting a credit card lifestyle will transfer approximately £3.2 billion in the three month period, findings from Santander Cards have revealed, as many providers implement introductory balance transfer periods.

According to the bank, the number of credit card holders intending on transferring their balance has increased by one third compared to the beginning of last year, although the total amount of debt has fallen from £7 billion.

Santander Cards director Emma Roberts said the figures are a "clear sign that consumers are becoming savvier" in terms of their management of finances.

"It's encouraging that so many Britons are planning to take control of their finances in the new year by transferring an outstanding credit card balance to a zero per cent deal," she commented.

Consumer Group Which? recently said that credit card customers should check their APR, with a zero per cent deal able to save somebody with a balance of £3,000 as much as £500 a year.

Kevin Still, director of EuroDebt, said: "There is a difference between taking control of your finances and potentially getting into a debt spiral. To benefit from transferring a balance the old card needs to be cut up or taken out of the wallet or purse to avoid further temptation.

"Many balance transfers have small print and fees associated with the process and the resultant APR at the end of the interest free period may be worse than the old card. We see many people starting Debt Management Plans or IVAs where some form of debt consolidation or balance switching exercise has failed."

Tags; Debt Management and Banking,

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