January 22, 2013
- Paying off debt in a sensible way can save hundreds of pounds
- Average interest free credit card debt transfer offers is now 23.2 months
With over 32 million* post-Christmas credit card bills expected to hit doormats in January and February, many hard-pressed households will be looking at how they can reduce their debts in 2013. Analysis by
found that people with an existing credit card debt at an average annual percentage rate (APR) of 17.32, would save £830** in interest alone by switching the debt to a cheaper interest-free credit card deal.
A recent webpoll*** by MoneySupermarket found 44 per cent will be looking to clear leftover 2012 debt, and of this, 14 per cent plan to pay off the built up debt by dipping into savings, and a further nine per cent will only repay the minimum amount off their credit card. A third (33 per cent) will transfer to a zero per cent balance transfer card and an additional 38 per cent will use their income in the next few months to pay off debts.
Credit card users only making the minimum repayments, or sticking with a credit card with a high interest rate will take much longer to pay off the debt and will pay significantly more in interest compared to someone who has moved their outstanding credit card balance to a zero per cent balance transfer card. For example, by moving an existing £3,000 debt to the market-leading 24 month balance transfer card from Barclaycard, and repaying £100 per month over the interest free period, you could save a huge £830 in interest compared to sticking with an existing card with an average market rate of 17.32 per cent APR, paying off the same amount each month.