Wednesday, March 2, 2011
Category:
Consolidation
According to research commissioned by Gocompare.com, 22 percent of the 3,000 UK adult consumers surveyed will carry a credit card debt throughout 2011. In fact, it was found that 7 percent of respondents will still be paying for last Christmas beyond June of this year. Figures from the British Bankers Association reportedly show that the UK’s total credit card balance stands at £61 billion.
Nevertheless, Gocompare.com’s findings have uncovered that in 2010, just 14 percent of the consumers surveyed switched credit cards. What’s more, 12 percent have reportedly never switched to an alternative credit card provider. However, it was also revealed that 29 percent of respondents said that they had ‘resolved to reduce their loan and credit card costs this year’.
Gocompare.com has advised that for people with good credit histories, ‘one of the easiest ways’ to save money is to switch from an interest-paying credit card to one with a zero percent introductory period. A charge in the region of three percent of the balance is reportedly likely to be added to the debt, but the balance will then be interest-free throughout the remainder of the introductory period. However, Gocompare.com have pointed out that this is subject to the credit card not being used for other spending or cash withdrawals, and subject to adhering to the terms and conditions.
Business development director of Gocompare.com, John Miles, commented: "The nation's credit card debt is now around £61bn with around 70% of that bearing interest. There are now several deals available offering interest free periods of over a year and others with low APRs for the lifetime of the debt. Transferring a balance from a card with a high interest rate could be an excellent way to kick start getting rid of your credit card debt for good."
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Homeowners who may be seeking an alternative to transferring their credit card balances and juggling multiple monthly repayments could consider taking out a
secured loan to wrap these into one. One of many finance options available, a secured loan for consolidation could be used to pay off any existing credit cards – thereby leaving the borrower with just one monthly repayment. What’s more, this single monthly repayment could even be lower than the sum of current outgoings. However, if opting for a secured loan to consolidate debt, it should be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.
