Moving forward into 2022
By Charlie Calver, Commercial ManagerJan 19th 2022
With inflation continuing to rise, and borrowing becoming more expensive as a result of the increasing Bank of England’s interest rate, the impact of the pandemic is still unfolding.
This follows a time when many found themselves with a reduced income due to the furlough scheme, and ahead of what is expected to be a series of tax increases to cover the cost of covid.
Bank of England data out this week shows that consumer credit rose by £1.23bn in November*, the highest increase in almost a year and a half. This suggests a greater reliance on lenders to tide customers over.
It’s therefore as important as ever that we continue to work with our partners to bring more transparent products to market, providing our customers with the tools they need to move their finances forward.
‘Tis the season to transfer balances
When offer periods come to an end, customers will usually find themselves paying interest on outstanding balances. With the average representative APR for non-balance transfer cards being 31%**, customers can suddenly find it much more difficult to clear debt quickly.
As we look to freshen up our finances after the festive season, we should all be making the new year's resolution to stop paying unnecessary interest.
Traditionally January has been the busiest time for balance transfer credit cards, with an annual average of £1.55bn† being transferred in the five years prior to the pandemic.
With TotallyMoney customers a third more likely to be accepted for a credit card now than at the start of the pandemic**, and balance transfer offers being their best since 2018‡, this year should be no different.
New options for customers
Following a series of API integrations in 2021, we were able to launch new partners to market in as little as four days. This provides customers with a greater choice of products, helping them gain financial momentum and get on the right track for 2022.
These integrations help improve transparency, enabling features such as pre-approval, guaranteed limits, and guaranteed rates. By removing the guesswork and letting customers know how likely they are to be accepted, the amount they’ll borrow and the interest rate they’ll need to pay, we can help them make one application and lessen the impact on their credit score.
By continuing this work in 2022, we expect these features to become the standard. As a result, together with our partners, we’re creating a more transparent market which benefits everyone.
** TotallyMoney research December 2021