Credit cards Updated:
Are you thinking about switching your credit card provider? Well, you're in good company. Research from Sainsbury's Bank Credit Cards has revealed that around 25% of card holders surveyed plan to transfer some or all of their outstanding balance to a new card by mid-2015, and they're doing so to take advantage of 0% interest deals.
Simon Ranson, head of banking at Sainsbury's Bank, said: "Our research shows a significant proportion of people are reviewing or intend to review their credit cards. This can be a worthwhile exercise, as many people could end up paying less or no interest on outstanding balances."
It can't be denied that it's a good decision. After all, why pay interest when you don't have to? The savings could be marked, too, particularly given how much will be switched – on average, those seeking balance transfers expect to switch £2,500 to a new card, and 12% intend to transfer more than £5,000.
Switching that kind of balance to a 0% interest card could dramatically reduce the amount of interest paid, and it could be a great way to clear the debt, too. Rather than fighting a losing battle with interest being added to the bill every month, you can actually see the balance reduce with every payment you make. Work out how much you need to repay each month to clear the debt by the end of the 0% period, and voila – your days of being stuck with credit card payments will have come to an end!
Are you one of the 25% thinking of switching to a 0% balance transfer deal? If so, you'll need the right card to accommodate. There are plenty to choose from these days, and you can even have up to three whole years to pay off the balance: Barclaycard has recently launched its market-leading 36 Month Balance Transfer Visa, the longest interest-free deal ever to hit the market.
However, you'll need to consider things like fees as well as the length of the term, and if you think you'll be able to pay off the balance sooner, don't automatically go for the longest deal available. For example, Barclaycard's 36-month credit card charges a balance transfer fee of 2.99%, but if you think you could clear it in a few months less, there are alternatives: MBNA's Platinum Credit Card Visa boasts a 0% deal for 32 months with a balance transfer fee of 1.94%, or if you could consider a 25-month deal, Barclaycard's Platinum 25 Month Balance Transfer Visa has a fee of just 1.30%.
It may not sound like a huge difference, but if you've got a substantial amount to transfer, the fee could add a sizeable chunk to your balance. It's all about finding the card that meets your needs, so check out our best buys to start your research and see if you could cut your credit card bill down to size.
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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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