Switching and debt management plan best options for credit card debts

A large number of UK consumers have placed the cost of Christmas on their credit cards putting pressure on their finances this new year. Comparison web site moneysupermarket.com advises the public to switch credit cards or seek debt management advice to clear those debts in the smartest way possible.

However switching to a new zero percent balance-transfer card may not be easy for some. Latest data shows that only four out of every 10 applications are being accepted by providers.

Peter Harrison, a credit card expert at moneysupermarket.com said, “It is extremely difficult to switch cards at the moment so you need to be savvy about tackling your existing debts. The best approach largely depends on your credit rating and how much you are able to repay every month.”

But he said there are still some great deals available although they are hard to obtain. Harrison added, “People need to be aware that, even if they are accepted for a good product now, there is no guarantee this will be the case in a year’s time, as such careful planning is required to ensure credit card debts are cleared in the most efficient way possible.”

To get the best deal, consumers are told to check out a comparison web site to find the best credit card provider offering the lowest interest rate.

To the estimated nine million consumers who used their credit cards during the last festive season, this would mean careful budgeting through the year to quickly pay off those debt.

For those who want to switch cards, they should consider the following before making the decision.

Check your credit rating to make sure that you have a good credit rating before applying for a credit card. Many providers have enforced stricter rules in their lending. But having a good credit rating does not guarantee approval.

Plan your budget on how you can repay your debt. If you want to switch a debt to a zero percent deal, try to pay off this debt before the balance-transfer period ends. Also, ensure that you can afford the monthly repayments to pay off the debt.

If you think you don’t have enough cash to repay a debt on a zero percent credit card, consider switching to a low-rate credit card.

More importantly, check with your provider if you are permitted to transfer their balance to a new provider. There are credit card providers that do not allow the transfer of existing debt to other cards within the group.