Savings expert explains how to slash credit card interest by ‘thousands’ of pounds (Image: Getty)
customers struggling with payments are being urged to consider a balance transfer card to save money.
New from UK Finance reveals that nearly half (49.4%) of credit card holders could benefit from a balance transfer, as they are currently paying interest on £33billion worth of debt.
A balance transfer allows eligible customers to move their existing to another provider, often with a small fee of 2% to 4%. In exchange, they can eliminate interest payments for a set period.
Analysts say competition in the market has increased in recent weeks, with two providers now offering balance transfer terms of up to 31 months – the longest since April 2023.
Alastair Douglas, CEO at TotallyMoney, said: “January’s a great time to get your finances in shape, so you can start the year on the front foot. This might include setting up a savings goal with a bank who’s offering a competitive rate, making the most of a current account switch offer, or cutting interest costs with a balance transfer.
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Nearly half of credit card holders in the UK could benefit from the tactic (Image: Getty)
“And with two banks now offering up to 31 months, you could press pause on interest payments until August 2027. Finding out if you’re eligible for an offer doesn’t take long, and it could save you hundreds if not thousands of pounds.”
For example, someone paying interest on the average balance of £2,916 each month could save £1,533 by taking advantage of the market-leading 31-month balance transfer offer.
Customers with a prime or good credit score may qualify for a 16-month card, saving £752, while near-prime customers could still secure a 9-month offer, saving £385 in interest, TotalMoney calculations show.
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Mr Douglas added that the longest offers are typically available to people with the best .
He said: “Download a personal finance app and check yours for free. If it’s not quite perfect, you should be given a personalised plan to get yourself financially fit for the new year.”
When applying, Mr Douglas recommended shopping around and paying close attention to offers that include pre-approval, guaranteed credit limits, fixed rates, and 0% interest periods.
He added: “That way you’ll know if you’ll be accepted before you apply, and you can be totally sure that you’ll get exactly what was advertised.”