The £6.5 billion credit card shuffle

Around one in four credit card holders have transferred debts to other cards in the past 12 months as they bid to cut costs, new research from MoneyExpert.com reveals.

The average amount transferred is £763.99 taking the total for card debts switched in the past 12 months to more than £6.516 billion.

But while the average amount switched is relatively modest around four per cent of credit card holders – about 1.4 million people – have transferred debts of £5,000 or more, MoneyExpert.com says. Those transfers however do not come cheap. Average balance transfer fees across the credit card market are currently 2.1 per cent which means a charge of £105 on a balance of £5,000. Some cards charge as much as three per cent.

The independent financial comparison website’s research reveals that about 24 per cent of credit card holders – around 8.52 million people – have taken advantage of balance transfer offers from credit card firms this year.

Scots have transferred the biggest amounts, research reveals, with an average balance transfer of £1,110.39. Around eight per cent of Scots have also moved amounts of more than £5,000 compared to four per cent for the country as a whole.

People aged between 30 and 50 are also the most likely to be transferring large balances. Around seven per cent of them moved amounts of £5,000 or more compared with just two per cent of 18 to 29-year-olds and two per cent of the over-50s.

Sean Gardner, Chief Executive of MoneyExpert.com, said: “It is yet more evidence of the UK’s debt culture that so many people have balances of more than £5,000 on their credit cards.

“While it is heartening that people are getting the message and taking advantage of balance transfer offers from other providers, customers need to remember that switching balances should also mean cutting debts. Changing to another card shouldn’t be seen as a licence to carry on spending.

“We would urge anyone with debts on their card to look around for the best possible deal and switch if they can. Look out for balance transfer fees when making your decision as they will make a difference to how much you save by switching

“And remember switching cards should be the first step to getting your debts under control. You need to commit to a plan to paying off your cards if at all possible.”

Current deals for zero per cent balance transfers include Barclaycard, Virgin Money and Citibank which all offer up to 12 months.

Around 74 per cent of credit card holders have not transferred any debt in the past 12 months with 18 to 30-year-olds the most likely to transfer debts. Around 32 per cent of them have switched cards in the past 12 months.