£1,831 could be the cost of not transferring a credit card balance

5 Jan, 2022

TotallyMoney, the credit app that helps everyone move their finances forward, highlights the cost of carrying a monthly credit card balance bearing interest and demonstrates why now is the time to act.

  • Figures show that more than half (54%) of customers with an outstanding monthly credit card balance are paying interest*
  • This comes at a time when balance transfer offers are at their longest since 2018**
  • TotallyMoney research shows customers are 31% more likely to be eligible for a credit card now than they were at the beginning of the pandemic†
  • A customer’s average interest-bearing monthly balance is £2,898‡, which means that not switching to the market-leading offer could cost an extra £1,831§

TotallyMoney warns that customers are carrying almost £30m in interest-bearing credit card balances‖, costing them millions in interest every year.

 

Play your cards right

With surging inflation massively increasing the cost of living in the UK, and the Bank of England’s interest rate rise making borrowing more expensive, the pandemic is showing no signs of releasing its squeeze on people’s finances.

One way in which customers can give themselves some extra breathing space is by cutting the cost of borrowing each month with a balance transfer card.

Balance transfer cards charge 0% interest for a set period of time — currently up to 35 months. This means 100% of your repayments will go towards clearing your debt and not towards paying interest, the result being that you can pay off your debts quicker and cheaper. On average they charge a fee of 2%¶ of the transactional value, so it’s always worth doing some calculations before applying.

TotallyMoney research shows that customers are a third more likely to be eligible for credit cards than they were at the start of the pandemic, so with more available offers, at even more competitive rates, now could be the best time to start saving.

Alastair Douglas, CEO of TotallyMoney comments,

“As we enter 2022 we should all be making the New Year resolution to avoid paying unnecessary interest. Especially at a time when many are feeling the squeeze of the soaring cost of living as the inflation rate hits a 10-year high.

“When it comes to credit cards, we know loyalty doesn’t pay. And with swathes of introductory offers coming to an end each month, customers can soon find themselves paying interest on any outstanding balances. One way to avoid this is by shifting interest-bearing debts to a balance transfer card.

“While balance transfer cards usually come with a small fee, customers can still save hundreds, if not thousands of pounds. With customers being 31% more eligible for cards than at the start of the pandemic, and lenders making even longer offers available, now could be time to grab a great offer.

“Customers should always check their eligibility, and keep a lookout for pre-approved offers. These will let you know how likely you are to be accepted before you apply. This can help you avoid credit rejection and protect your financial future.

“At TotallyMoney we’re on a mission to help everyone move their finances forward. One way to do this is by not paying interest when you don’t need to. Switching to a balance transfer card means customers can clear debts quicker and gain financial momentum along the way.”