Debt Issues Mean ‘2.6m Will Switch Credit Cards’
Posted 2008-01-13
2008 is expected to be a busy year for credit card holders and companies with 2.6 million Brits planning to switch plastic provider.
However, about 6.6 million will be sticking with their current cards, paying an average of 16.82 per cent interest, according to figures from MoneyExpert.com.
Many are being put off by stories of credit card rejections rising as the credit crunch bites, experts say.
January is expected to be one of the most hectic months with seven per cent of all credit card customers switching, although people are being urged to use interest-free periods as a chance to pay off debts, not enlarge them.
Sean Gardner, CE 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’s good to hear people are taking action but worrying that millions will simply add their Christmas debt to their existing debt. Piling debt 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.”
Anyone looking to switch to a zero per cent credit card deal is being urged to watch out for balance transfer fees – which at three per cent could cost £60 on a £2,000 debt.
The longest interest free periods on offer now are 15 months with Egg and Virgin Money – although nearly three-quarters of all credit cards offer some sort of transfer deal.
Card customers aged between 25 and 34 are the most likely to switch credit cards in January, and 15 per cent of customers in Scotland plan to do the same – compared with just six per cent in London and seven per cent in the south-east.
June 19th, 2008 at 4:13 am
Its true the general public lacks understanding of equity but they all understand when their credit worth reduces that they are in credit.
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ken long
http://www.debtadvicetrust.org/debt/debt-advice.html