Britons stuck in apathetic credit card switching rut

3rd November 2014

img

With only one payday left before Christmas, complacent credit card holders could be missing out on a much better deal by sticking with their current provider, claims MoneySuperMarket.

The comparison site found that on average, credit card holders have been with their existing provider for seven years.

Almost 20%, or one in five have been with their provider for between five and 10 years, and a further third, for more than a decade.

Just a quarter of credit card users are likely to switch their credit card within the next year, with a further two thirds are unlikely to switch at all. The research found that men appear to be the savviest switchers, with 28% likely to make a change in the next 12 months, in comparison to 17% of women.

The analysis also revealed the main reasons why people aren’t likely to switch their credit card, with 21% they can’t be bothered, and 28% admitting they haven’t thought about it.

However the main reason for not switching is good customer service, with 30% of consumer citing this as a main reason for sticking with their current provider. This is followed by the good incentives offered to them, at 27%. In contrast, the top three reasons people would switch their credit card are perks and benefits, bad customer service and a longer interest free period.

Kevin Mountford, head of banking at MoneySuperMarket said: “The credit card market has never been more competitive and in the run up to Christmas, those looking to use plastic for their festive spend should start to take advantage of the attractive deals on offer early.

“When it comes to credit cards, it is especially important to work out how you will use it, as this will determine which type you should choose. If you can afford to clear the balance at the end of every month, a cashback card will reward you each time you spend.”

Right now American Express for example, offers 5% cashback in the first three months on its Platinum Cashback Card. All subsequent spend will earn 1.25%. Based on a monthly spend of £500, you could earn around £152 over the year – less the £25 annual fee for the card.

“This could be put towards next Christmas’ funds. On the other hand, if you want to buy an expensive item but can’t pay the balance back in full, it is better to opt for a card with a long interest free period – bearing in mind that you will need to pay the balance back before the 0% period ends to avoid paying for this Christmas this time next year,” added Mountford.

Leave a Reply

Your email address will not be published. Required fields are marked *