Brits Spending Over £1.5 Billion In Interest On Interest-Free Credit Cards

Recent figures relating to the way people repay balances on interest free credit cards have shown that, despite the interest free period offered on these cards, consumers have still spent over one and a half billion pounds on interest over the last two years. The research was carried out by Moneysupermarket, and indicated that £1.7 billion was being spent by consumers in the UK on making unnecessary interest payments on their balances.

The way to try and eliminate the need to pay interest on your credit card balance is to either repay the balance in full by the end of the specified interest free period, or to transfer any remaining balance that is left at the end of the interest free period onto another interest free balance transfer card. However, figures show that many Brits are failing to do this, and are therefore incurring interest charges that they would otherwise not have to pay.

The research carried out by Moneysupermarket showed that around eighteen percent – or one in five – credit card holders failed to transfer their credit card balances once the interest free period on their existing card expired. Any balance that is left on a card after the interest free period expires starts to incur interest charges, often at a very high rate, which can prove very costly for those with larger balances or those that decide to make minimum repayments.

Robert Kenley, head of credit cards at Moneysupermarket, stated: "Balance transfer cards offer a sensible way for borrowers to manage their debt, and wherever possible people should try to clear their balance during the zero per cent offer period. However, our research shows only 15 per cent of borrowers actually manage to do this."

Alisdair Milton
17th November 2006

More Information:

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• Quick Balance Transfer Guide
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