Credit Card Debt Held By Many

Some 22% of consumers will keep their credit card debt throughout this year and yet many have never switched credit card provider.

One of the easiest ways for people with good credit rating 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.

Research from Gocompare.com shows that not only will 22% carry their credit card debt through the year, some 7% will still be paying for Christmas 2010 beyond June 2011.

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.”

Credit cards with great balance transfer and purchase periods include

- Barclaycard offering 0% on balance transfers for 18 months. There’s a 2.9% balance transfer fee, however, if you apply before the end of February you will also receive £20 cash back on the fee for transfers over £3,000

- Virgin Money credit card with a 16 month 0% transfer period and a fee of 2.89%. There is also 0% interest on card purchases for 3 months.

- 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%

* Source – Britsh Bankers Association February 2011 newsletter.