Credit cards Updated:
Around three million people are planning to take out new credit cards over the next 12 months because the interest free period on their cards has expired.
According to Sainsbury's Finance, almost two million borrowers intend to apply for another credit card as the interest free period on their 0% balance transfer deal is coming to an end.
Meanwhile, a further 867,000 people are planning the same course of action because their 0% purchase deal has lapsed.
Given the massive hike in interest rates that is apparent once interest free deals finish, it is a welcome surprise that so many borrowers are set to shop around for a new credit card to avoid this.
Indeed, Moneyfacts.co.uk data reveals that the typical balance transfer APR on cards offering interest free periods rises to 18.2% APR once these expire.
Similarly, the average typical interest rate for cards offering an introductory 0% interest rate on purchases is 18.0% APR.
Sure to prove popular amongst borrowers wanting to transfer an existing balance to a new credit card are the:
which both offer the longest 0% balance transfer period currently available of 22 months.
A whole raft of 20 month 0% balance transfer deals are also available from well known providers including NatWest, Royal Bank of Scotland and Virgin Money.
Stuart McKeggie, head of Sainsbury's Credit Cards, said that in total 7.9 million people plan to take out a new credit card between October and September 2012.
Around a third of these said it is because of their interest free periods ending on their existing cards.
"This is still clearly the main reason for taking out a new card, and for those that want to spread their costs, it can be a sensible financial planning option," he added.
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