Bridging

If the advertisements offering 0% interest on a new credit card have lured you into considering switching credit companies, you aren’t the only one. According to an Abbey study of over 1,000 adults, what would equate to three million British consumers plan to switch credit card company in 2008.

The study looked at genders and locations and found that eight percent of men and seven percent of women said they would transfer companies. Men averaged a balance of £3,395, whereas women averaged £1,820 in credit debt.

As for locales, the credit debt to be transferred in the Midlands averaged £3,021; for the south-east of England £2,900; for northern England it averaged £2,501; Scotland averaged £2,154; and in Wales and the south-west, the average sum was £2,022.

In response to their study, Roger Lovering, managing director for Abbey Credit Cards reflected a positive note, that, “it’s great to see that many people are already turning their attention to getting their finances in order. January credit card bills can often catch people by surprise, so we would encourage people to keep a check on their finances over the festive season and plan ahead to ensure they aren’t paying over the odds for their plastic.”

“Credit card companies can expect a busy transfer season in January as millions of us wake up to the cost of Christmas before the New Year financial hangover set in,” says Sean Gardner, chief executive of MoneyExpert.

MoneyExpert’s recent survey shows that although 6.6 million Brits will stay with their current credit card, 2.6 million will switch credit card companies in 2008. Furthermore, the study shows those most likely to switch companies are between the ages of 25 and 34. Scotland has the highest percentage of planned transfers, with 15%; London estimates 6% and 7% for the south-east.

For the estimated 7% of all credit card consumers who will switch companies in January, Mr. Gardner advises that the best use of an introductory, interest-free period is to pay off current debt rather than accumulate more. These interest free periods can be found; two of the best deals are with Egg and Virgin Money, offering fifteen months of 0% interest.

Mr. Gardner explains, “It is good to hear people are taking action but worrying that millions will simply add their Christmas debt to their existing debt. Piling debt on debt is simply adding to the spiral of increasing financial trouble. People should be taking action to get their debt under control and the first step towards that is to cut borrowing costs. The next important step is then of course to pay the debt off, but transferring a balance is at least a start.”

In addition to this sage advice, consumers are warned to plan for balance transfer fees when switching credit card companies, as this small percentage can add up to a significant expense for a large debt.