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Brits stuck in credit card switching rut

3rd November 2014 Print

With just one more payday left before Christmas, complacent credit card holders could be missing out on a better deal by staying with their current provider, according to research by MoneySuperMarket.

The comparison site found that on average, credit card holders have been with their existing provider for seven years. One in five (19 per cent) have been with their provider for between five and 10 years, and a further third (31 per cent) over 10 years. Only a quarter of credit card users (23 per cent) are likely to switch their credit card within the next year, with a further two thirds (66 per cent) unlikely to switch. Men appear to be the savviest switchers, with 28 per cent likely to make a change in the next 12 months, in comparison to 17 per cent of women.

The research also revealed the main reasons why people aren’t likely to switch their credit card, with 21 per cent claiming they can’t be bothered, and 28 per cent admitting they haven’t thought about it. The main reason for not switching is good customer service, with 30 per cent of consumer citing this as a main reason for sticking with their current provider. This is followed by the good incentives offered to them (27 per cent). In contrast, the top three reasons people would switch their credit card are perks and benefits (25 per cent), bad customer service (21 per cent) and a longer interest free period (16 per cent.)

Kevin Mountford, head of banking at MoneySuperMarket said: “The credit card market has never been more competitive and in the run up to Christmas, those looking to use plastic for their festive spend should start to take advantage of the attractive deals on offer early. It’s clear from our research that there is an appetite from credit card holders to get a better deal. Whether it’s the perks on offer from a cashback credit card or, the advantage of interest free spending to help with the cost of Christmas, comparing deals using a tool such as our SmartSearch will enable you to weigh up the deals on offer without damaging your credit file.

“When it comes to credit cards, it is especially important to work out how you will use it, as this will determine which type you should choose. If you can afford to clear the balance at the end of every month, a cashback card will reward you each time you spend. American Express for example, offers five per cent cashback in the first three months on its Platinum Cashback Card. All subsequent spend will earn 1.25 per cent. Based on a monthly spend of £500, you could earn around £152 over the year – less the £25 annual fee for the card. This could be put towards next Christmas’ funds. On the other hand, if you want to buy an expensive item but can’t pay the balance back in full, it is better to opt for a card with a long interest free period - bearing in mind that you will need to pay the balance back before the zero per cent period ends to avoid paying for this Christmas this time next year.”