T-DAY SEES BRITS RUSH TO MOVE CREDIT CARD DEBTS

Monday will see so many Brits rush to transfer their credit card balances, that money experts have dubbed it Balance Transfer Day.

Free online financial comparison experts, money.co.uk, report a 40% surge in credit card balance transfer enquiries on the second Monday of every January, which this year falls on January 11th.

The news comes on the back of research by money.co.uk that reveals 34% of UK adults will be taking credit card debt into 2021.

T-Day (or Transfer Day) sees a huge spike in applications for new 0% interest credit cards, allowing Brits to transfer their existing balances and take advantage of incurring no interest on their monthly repayments.

The money.co.uk study, polled 2,000 UK adults in December 2020, and reveals that the average British adult ended last year with £9,246 worth of total debt. Some £2,465 of the average debt is owed on credit cards, according to the research. Those aged 45-54 have the most credit card debt (£3,121) with those aged 18-24 having the least (£1,640).

One in five Brits plan on paying off their debt by consolidating the different debts they owe, up 7% compared to the previous year.

Salman Haqqi, personal finance expert at money.co.uk, said: “0% balance transfer credit cards are a great way to reduce the amount of interest you are paying on debts, as long as you can afford the monthly repayments.

“While using 0% interest balance transfer cards can provide invaluable breathing space for

those seeking to clear their debt, they do require careful management. Even though

introductory offers are generous, consumers must resist the temptation to use their card to make purchases as most will charge a high rate of interest on any new debt.”

In 2020, 61.9 million UK residents had credit cards with an average purchase via credit card of £54.09. The previous year, 2019, the total credit card debt in the UK was £72.6 billion, which equates to £2,649 credit card debt per household or £1,386 per adult.

Total credit card spending has been on a steady upward climb in the UK since 1993. October 2018 saw the biggest month on record with £18.45 billion spent. As well as this general increasing trend, each year follows a distinct pattern, having a sharp increase in credit card spending in the months leading up to Christmas, followed by a steep drop around February.

Geographically, people living in Northern Ireland have the most credit card debt (£8,323) whilst those in the south-west have the least (£1,473).

But UK adults have actually reduced the amount of debt on their credit card by an average of £500 compared to the previous year, according to the money.co.uk research.

UK shoppers spend an average of £452 each on credit cards at Christmas, almost £8.5bn nationwide over the festive period.

While 0% balance transfer credit cards are a great way to cut down on interest payments, they do come with a variety of terms and conditions that money.co.uk’s personal finance expert Salman Haqqi cautions people to be aware of.