Switching cards could save you money

Covered mag, presented by Gocompare.com
  • | by Kristian Dando

Around a fifth of British consumers (22 per cent) will carry a credit card debt throughout this year with 7 per cent still paying for Christmas 2010 beyond June 2011 according to new research from Gocompare.com.

Despite this, only 14 per cent of consumers switched their credit cards in 2010, while 12 per cent have never switched.

One of the easiest ways for people with good credit histories to save money is to transfer the balance of their credit card to one with a 0 per cent introductory offer. Nationwide and Barclaycard are two credit card providers currently offering long 0 per cent terms. You will usually have to pay a charge of around 3 per cent of the balance which is added to your debt but after that, your balance will be interest free for the duration of the introductory period as long as you don't use the card for other spending or cash withdrawals and you keep within the card's terms and conditions. 

A consumer transferring a £3,000 balance to the new Barclaycard with an 18 month interest free period for balance transfers could save £586. Consumers who will take longer than 18 months to clear their balance may wish to consider a deal with a low interest rate for the lifetime of the debt. MBNA currently offers the ‘Rate For Life' card with a rate of 5.9 per cent for the life of the debt with a 1.5 per cent balance transfer fee.