Credit Cards & Loans
Not transferring a balance could lose you hundreds in savings
Credit card holders who would never consider transferring the balance on their cards could be missing out on hundreds of pounds, according to Nationwide.
More than half of UK credit card holders are said to never consider doing a balance transfer, which could be losing them as much as £350 in savings.
According to the new report, by not moving their balance, Brits are not taking advantage of a useful way to manage their debt, and more importantly, could be missing out on significant savings.
Paul Carvell, Nationwide’s head of credit cards, said: “The New Year can often bring with it the stress of how to manage debt racked up through Christmas-related expenditure, particularly on the credit card.
“By taking advantage of a 0 per cent balance transfer offer, people can relieve some of that pressure, giving them the opportunity to reduce those balances at a manageable rate.”
Credit cards users are being urged to shop around before transferring their balance on to a card, and to make sure that they choose a card that will enable them to clear down debt more quickly.
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A recent poll found of those who are planning to borrow money this year, 43% plan to transfer their existing debt onto a zero per cent balance transfer card, while a third will take out a loan.
Comparison site, MoneySupermarket.com says that people should understand their credit files before taking steps to clear down debts.
Tim Moss, head of loans and debt at MoneySupermarket.com, said: “It is vitally important people understand their credit file before applying to avoid rejection or being offered higher rates than expected.
“Each lender applies their own criteria when processing an application and it is almost impossible to second guess when applying. Consumers need to be savvy and understand what they can do to minimise the risk of being rejected.
“If you know your credit score is less than perfect, or you don’t have much of a credit history, it’s not the end of the road as there are steps you can take to improve your rating and increase your chances of getting a loan.
“Doing a little bit of research can make all the difference between being accepted or rejected from receiving a loan or credit card in 2013.”