Brits ‘needlessly’ pay £9bn in credit card interest

Credit card holders in the UK are needlessly paying out over £9 billion in interest payments every year.

Research by Abbey credit cards found that many card holders are paying interest on their credit balance when they could save significant money by switching to an interest free credit card.

Seven in ten (69%) Brits have at least one credit card, with an average credit card debit of £3,256, Abbey found.

However, more than half (55%) of card holders have not moved any of their existing debt to a 0% deal.

Just one in ten (11%) of card holders have moved all their existing debt to an 0% deal, whilst only one in five (19%) plan to take advantage of an 0% deal in the next few months.

Forty percent of credit card holders have been in debt for at least a year, whilst 22% have had an outstanding balance to pay on their card for at least four years.

Callum Gibson, Abbey’s head of credit cards, said: “By transferring an outstanding credit card balance to a 0% deal, Britons could save an average of £443 a year, a huge cost saving in today’s difficult economic climate.

“At a time when people are having to manage their finances more carefully, transferring to a 0% deal is a sensible way of ensuring your money goes further”

Discuss this in the Finance Markets forums

Story link: Brits ‘needlessly’ pay £9bn in credit card interest