The start of a new year can often be a difficult time for many consumers, with those who overspent during the festive period often carrying debt into January. To spread this debt, savers may turn to an interest-free balance transfer credit card, however, as Moneyfacts.co.uk reported recently, the length of interest-free balance transfer credit card terms is getting shorter.
"Consumers may be disappointed to know that lengthy interest-free offers on balance transfer credit cards are reducing, but it is still worthwhile for consumers to take advantage of the best deals around should they need to transfer their debts," said Rachel Springall, finance expert at Moneyfacts.co.uk. Despite the drop in interest-free term, Rachel still urges consumers to move credit card debts as we enter 2019: "MBNA is offering the longest interest-free deal for balance transfers at 33 months with a 1.99% fee, but borrowers who can pay the debt back sooner could opt for a fee-free option instead, such as Santander offering 27 months' interest-free without a balance transfer fee or credit card usage fee."
Not only can savers manage debt more wisely, but Rachel offers advice on how to spend more wisely in the future. One way she suggests to do this is to avoid overusing store cards, as some charge an APR as high as 29.9%, making it costly if you are unable to pay them off quickly. "Instead of using one of these cards, shoppers could consider a cashback card, such as the American Express Everyday Platinum Cashback card, which pays 5% cashback on purchases for the first three months," Rachel said.
Last year was a turbulent year for the high street, with many big names taking a hit. Rachel warns that this means savers should be aware when pocketing gift cards they may have received as Christmas gifts. "If a retailer were to collapse, it's unlikely their branded gift card would be accepted anywhere else," added Rachel. Not only this, but looking ahead to future gifts, "it might be simpler to give the gift of cash instead because, as we had seen in 2018, even the biggest retailers can fall".
Among gift cards, many people may have received presents they did not want, or will not use this Christmas. According to VoucherCodes.co.uk, around seven in 10 people will have received a gift on Christmas day that they know they will never use, and less than a third of consumers will return a gift to a retailer for a refund or replacement. With many looking to return items, Rachel advises that it's important to know your rights on returns.
"Shoppers may well have made some impulse buys over Christmas, or even during the Boxing Day sales, so it's reassuring to know that they would typically have around 30 days to return an item for a refund or store credit for most goods. It's important to check the returns policy of the store at the point of purchase to make sure you don't miss the deadline," said Rachel.
With so many purchasing and reselling gifts at this time of year, it also makes it the ideal time for scammers to surface. "When shopping online, buyers must be sure to take extra care before they commit to a purchase," warns Rachel. "For those unlucky enough to be a victim of card fraud, there are regulations and legal protections in place to ensure they do not lose out financially, so it's important to be aware of the rules in place."
In addition to being vigilant and legally savvy, credit cards can also offer shoppers some protection. As Rachel explains: "Spenders using a credit card have added protection under Section 75 of the Consumer Credit Act*, which states a service or items that cost over £100 can be refunded, as the card provider takes the same responsibility as a retailer would if things go wrong with the purchase."
Shoppers purchasing items without using a credit card should not be alarmed, as they may still be able to get a refund on their goods by approaching their bank under the chargeback scheme. Shoppers can find more information about the chargeback scheme here.
*Please note: Section 75 only applies if there is a breach of contract (e.g. the supplier doesn't ever send the goods to the purchaser), or misrepresentation (e.g. the description of the goods is misleading).
Take a look at the Moneyfacts Best Buy charts for the top cashback credit cards currently available.
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.