51% of credit card holders seek lower rates

Posted 2007-11-23

Many Britons are temporarily reducing their immediate interest payments on their outstanding credit debt by transferring high-interest cards to low - or no - interest cards. Almost 29% are seeking the no-interest introductory periods for new purchases, in order to allow them to spend further, at no additional cost.

Financial services provider Abbey shows 51% of credit card holders are switching cards to gain access to an introductory, interest-free balance transfer period. 

Managing Director of Santander Cards, (which provides Abbey’s credit facilities), Roger Lovering, stated, “These figures just show the intense competition in the credit card market. With £11 billion at stake, it’s the credit card with the best deal that wins.”

Competition for the lower rates, and the no-rate introductory period, seems to be driving the credit card industry to reduce their over-all rates. But consumers are cautioned to read the fine print when switching cards; and remain mindful of when the introductory period ends - along with what the rate will be at the end of that period. Many Brits could find themselves locked into a higher rate situation than if they had stayed with their original card company. This is especially true for those individuals who continue to charge on their cards – only to find they have higher fees in the end.

The data from Credit Action shows that the average consumer credit debt at the end of August 2007 was at £4,524 per person - including overdrafts and unsecured loans.

Choosing a secured loan borrowed against property could allow Britons to borrow at a lower rate, than what may be attached to a credit card, while at the same time securing a fixed repayment schedule to eventually clear all their debts.

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