Credit cards Updated:
UK credit card holders are set to shift a total of £2.8 billion onto new cards in 2011, new figures show.
Over 2.8 million people will thrash out a balance transfer deal this year, carrying over an average of £1,105 – a figure that has fallen considerably since the end of 2008, when it was an average of £2,290.
Almost one in three credit card holders with an outstanding balance are planning to transfer all or some of this debt to a new card this year, equivalent to 2.8 million adults in total.
Around 1.5 million of these say they will do this within the first three months of 2011.
Despite the average balance transfer being smaller than in 2008 and 2009, it appears that a significant part of this debt may have been incurred some time ago, as 3.6 million Britons admit that they are still paying off debts from Christmas 2009, equivalent to around £1.1 billion or £303 each.
"Our research shows that millions of people are switched on to the benefits of transfer offers and are choosing to take a proactive approach to managing their money, which is great to see," said Ian Coles, director for Santander Cards.
"The fact that the average amount being transferred has fallen considerably over the past couple of years would also suggest that consumers have reined in their spending and that credit cards are being increasingly well managed.
"January can be a particularly tough time financially, which is why we encourage consumers to keep a close eye on their finances and to shop around to ensure that they are receiving the best rates."
Younger adults are by far the keenest credit shifters, with 41% of those aged 18-34 with an outstanding credit card balance planning to transfer this to a new card next year.
By contrast, only 14% of over 55s intend to do the same although those who are planning a New Year's balance transfer will move on average £1,296 to their new card, which is considerably more than 18-34s who will only shift £923.
Those looking for a balance transfer could well be in luck as Moneyfacts.co.uk research recently found that the 0% market was at its largest for three years.
Furthermore, Barclaycard has launched a new 0% balance transfer card that allows holders a 17 month interest free period – the highest ever.
For the full range of 0% balance transfer cards, Compare 0% balance transfer credit cards
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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