Two million balance transfer applications rejected

Two million consumers have had their applications to transfer their credit card balances declined in the last year, according to a new report from uSwitch.com.

According the survey, British consumers have been refused credit card balance transfers totalling £3.5 billion. Overall, more than one in ten credit card holders, around 3.32 million people, have had a credit card application rejected in the last year, with 57% of those being for balance transfer cards.

For those without credit card debt, the inability to switch cards may sound like little more than an annoyance, but for so called ‘rate tarts’ who switch from interest-free deal to interest-free deal to avoid hefty interest rates, a refused application can come as a serious blow. With the average APR at currently at 17.3%, such people will be forced to fork out an average of £282 each over the next year, totalling £535 million.

The market share held by balance transfer credit cards is falling. There are now just 178 balance transfer credit cards available, representing 74% of all deals available – a market share fall of 6% in the past year. Long lasting deals have been the first to go, with the availability of10 month 0% balance transfer cards dropping by 83% to just one deal.

Louise Bond, personal finance expert at uSwitch.com, said:

“We can’t ignore the fact that the country is in economic turmoil – a situation which has been catalysed by bad consumer credit. The knock on effect for credit card customers is that those with a less than perfect credit history could find themselves being turned down for the next best 0% deal, forcing them to pay interest. This is a huge problem for switchers as these people have accumulated debt based on the fact they do not have to pay interest on it.”

If you’re looking for a 0% balance transfer deal, head over to http://www.totallymoney.com/credit-cards/ where you can compare the best offers from top UK lenders to find the card that works best for you. When you’ve found the card you want, just click Apply to start the application process.