1 in 5 will carry a credit card debt throughout 2011
According to research from Gocompare.com, 22 per cent of consumers will carry a credit card debt throughout this year with 7 per cent still paying for Christmas 2010 beyond June 2011.
However, with the nation's collective credit card balance standing at £61 billion, only 14 per cent of consumers switched credit cards in 2010 and 12 per cent of credit card holders have NEVER switched their card provider. 29 per cent of survey respondents said they'd resolved to reduce their loan and credit card costs this year.
With card providers trying to tempt customers to switch with extended 0% balance transfer deals two new offers from Barclaycard and Nationwide could signal a battle for the 86 per cent of Brits who didn't switch their credit card provider last year.
One of the easiest ways for people with good credit histories to save money is to transfer the balance from an interest paying credit card to one with a 0% introductory period. You will usually have to pay a charge of around 3% of the balance which is added to your debt but after that your balance will be interest free for the duration of the introductory period as long as you don't use the card for other spending or cash withdrawals and you keep within the card's terms and conditions.
A consumer transferring a £3000 balance to the new Barclaycard with an 18 month interest free period for balance transfers could save £586.00.
Barclaycard have launched a card offering 0% interest for 18 months on balance transfers with a fee of 2.9%. However, that fee will be reduced by £20.00 for transferred balances of over £3,000. Consumers will not be able to transfer balances between two Barclaycards and the rate will revert to 16.9% APR at the end of the introductory period.
Earlier this week, Nationwide replaced their Gold credit card with a new Nationwide credit card offering a 17 month 0% interest period for balance transfers and 6 months 0% interest for purchases. The balance transfer fee is 2.95% and the rate will revert to 15.9% APR at the end of the introductory period.
Consumers who will take longer than 18 months to clear their balance may wish to consider a deal with a low interest rate for the lifetime of the debt. MBNA currently offer the ‘Rate For Life' card with a rate of 5.9% for the life of the debt with a 1.5% balance transfer fee.
John Miles, business development director of Gocompare.com, said: "The nation's credit card debt is now around £61bn with around 70% of that bearing interest. There are now several deals available offering interest free periods of over a year and others with low APRs for the lifetime of the debt. Transferring a balance from a card with a high interest rate could be an excellent way to kick start getting rid of your credit card debt for good."