11th January 2016
Around seven million UK adults are considering transferring a credit card balance in 2016, according to research from Sainsbury’s Bank.
The survey shows consumers presently have an average outstanding credit card balance of £2,347.
But in order to make the most of their balance transfers, the bank is urging card holders to transfer their balances as soon as possible.
Sainsbury’s data shows that January is the busiest month for balance transfer card applications, followed by February and March.
Simon Ranson, head of banking at the group said: “Transferring a credit card balance can be an excellent way of paying down debt and organising finances if managed properly, and January, just after the Christmas period is a popular time to do this.
“We’d encourage card holders to pay off as much as they can each month rather than just making the minimum payment as this will make a huge difference in paying down the outstanding balance.”
In the balance transfer market, 69% of applications are for traditional long interest free period cards.
However, the bank’s data shows that of card holders who take out the long balance transfer credit card, only 48% transfer a balance in their first month of the account being open. This is followed by 24% transferring a balance in month two.
Ranson added: “We’d urge people who have set up a balance transfer card to move their balances quickly to save paying unnecessary interest.
“By not transferring their balances straight away, card holders could potentially still be incurring interest with their old credit card providers.”
Of those card holders transferring a balance, the research showed 15% do a second balance transfer within the first 10 months, the majority of which occur in months two, three and four from account opening.