Many credit card customers plan to switch to 0% balance transfer cards

According to a recent report an increasing number of credit card holders are planning to switch to a 0% balance transfer credit card over the coming months in a bid to try and avoid interest charges on their existing cards.

Many consumers already have balances on high interest credit cards, many of whom may have run up additional debt over the Easter period on trips away and holidays. By switching to a 0% balance transfer card many of these cardholders can escape the need to pay interest on their credit card debt.

The research was carried out by Sainsbury’s Finance, and showed that around 4.3 million credit card users planned to switch to a 0% balance transfer card by July so that they could enjoy a period of interest free credit within which to repay their debt. Around £6.68 billion is expected to be transferred onto 0% balance transfer cards by July.

Although the average amount per person that is expected to be transferred is just over £1500 there are around 180,000 cardholder that plan to transfer over £5000.

One official from Sainsbury’s Finance said that he was not surprised at the popularity of these balance transfer cards, stating: “Our research shows that there are an estimated five million people with outstanding balances who are not only incurring interest but also admit that it may take them longer than one month to clear their spend.” With many consumers having maxed out their high interest credit cards, officials state that many could benefit from transferring their balances.

However, there may be a few hurdles for those planning to switch. A recent report showed that the number of 0% balance transfer cards with capped balance transfer fees had plummeted over recent months.

Also, tighter credit conditions could make it more difficult for some people to get a balance transfer card.