LONDON, October 28th, 2013.
25% of credit card holders miss payments on long term balance transfer cards and could be forced to pay 18% APR
As Barclaycard unveils its 30 month Platinum balance transfer deal, the longest offer in the history of the credit card, new research from TotallyMoney.com, the credit comparison experts, reveals that one in four (25%) consumers who have secured a long term balance transfer deal have then gone on to miss a monthly repayment. As with the majority of credit card issuers, this breach of terms and conditions means customers could lose the 0% balance transfer deal before the end of the offer period and be forced to pay the default purchase APR which is on average 18%.
Across the credit card market, a total of 7.3 million (24%) credit card holders admit to missing credit card payments in the last two years. Not only does this breach the credit card terms and conditions for some, it also has a detrimental impact on the individual’s credit record.
In total, more than one in five consumers (22%) hold a balance transfer credit card with an average balance of £2,167. With more than 6.54 million balance transfer credit card holders, just 33% of these have a direct debit in place to ensure they never miss a monthly payment.
Will Becker, CEO and co-founder of TotallyMoney.com comments: “It’s great to see the credit card market rife with competitive new deals for consumers. Barclaycard’s new 30 month Platinum 0% balance transfer deal is the longest we’ve ever seen and can save people with the average balance transfer of £2,167 an incredible £715 in interest over the term. However, consumers must ensure they make at least the minimum repayment on time every month or they risk being forced to pay the purchase APR on their balance which is on average around 18%. This is the case with the majority of balance transfer deals.
“Consumers are being stung with rising costs across every other area of their life with fuel, food and energy prices being hiked every day. Therefore reducing credit costs is more important than ever before and this record breaking deal offers the biggest interest saving ever available. In fact, a saving of £715 is more than five times the average dual fuel energy bill increase (£131) made in recent weeks by one of the UK’s biggest energy suppliers.
“These competitive new credit card deals couldn’t land at a better time as today’s reports from the Ernst and Young ITEM Club predict consumer credit will gradually pick up pace, growing 1.5% this year and 3% in 2015, after falling 23%, or £50bn, since 2008.”
Best buy deals have never been so competitive with 68% of all credit cards available providing a 0% balance transfer facility for up to 30 months – 62% of these are interest free for 12 months or more. With a balance transfer fee of 2.9%, Barclaycard’s Platinum 30 month deal will cost consumers with the average balance of £2,167 a total of almost £63 to switch. For people that plan to pay their balance off in less than 30 months, shorter 0% deals with lower balance transfer fees starting at just 0.75% will offer better value.
To research the best credit card deals available, visit TotallyMoney.com. The website enables consumers to see exactly how much money they will earn or save by switching to the best deals based on annual spend, borrowing and repayments. It also identifies which of these deals consumers are actually eligible for currently a major inefficiency with rejection rates hitting 70%.
TotallyMoney.com, launched in 2007, is the UK’s leading credit-focussed comparison website which sets out to make it simpler for consumers to compare credit cards, loans and mortgages. With a revolutionary approach to credit comparison, TotallyMoney.com uses exceptional comparison tools to empower people to make better financial choices.
As part of the Media Ingenuity Group, TotallyMoney.com sits alongside affinity credit card brands. Fluid is a portfolio of market leading ‘prime’ products issued in partnership with MBNA, Luma a ‘sub-prime’ credit card partnership with Capital One and Granite card with Vanquis Bank. Being both a credit comparison service and a marketer of credit card brands gives the business a unique and in-depth perspective of the industry.
Notes to Editors
1 All calculations are based on research carried out through OnePoll from the 23rd – 29th August 2013 amongst 2,000 credit card holders. In addition, 1,103 credit card holders were asked what type of credit card is their main card.
2 Based on survey findings (above), long term balance transfer deal are defined as 18-25 month deals.
4 Based on TotallyMoney.com market analysis 68% of credit cards currently on the market offer an introductory 0% balance transfer period (Defaqto – October 28th 2013).
5 Based on TotallyMoney.com market analysis 62% of credit cards with an introductory 0% balance transfer period have a period of 12 months or longer (Defaqto – October 28th 2013)