Languishing credit card debt could affect nearly a third (27%) of Britons who opted to fund this year's holiday with their plastic, according to recent research from Halifax.
And with a further 28% of Brits spending between £500 and £1,000 on their summer break, this kind of outstanding balance - which comes with typical interest rates of between 17% and 18% - will be a most unwelcome souvenir.
Getting back to square one
But, while there is not much you can do about the weather, you can at least tackle any financial summer hangover head on. The best way to clear a credit card debt is to pay it all off in one fell swoop but of course, for many, this isn't possible.
However, there are steps you can take to minimise the interest you'll be charged if you need to repay it gradually.
Weighing up the cost of self-help
If you've got an excellent credit rating you may qualify for one of the interest-free balance transfer deals on the market. However, bear in mind that they aren't totally free as you will be charged a balance transfer fee - typically about 3.0%. This will add £60 to the cost of a £2,000 debt.
Such fees can be worth paying however. Peter Harrison, moneysupermarket.com's credit card expert said: "Most of the time it makes sense to pay the fee in return for the 0% interest rate. But this does depend on the balance outstanding and the length of time it will take you to clear your debt. If you won't be able to pay off the balance during the interest-free period, a card offering a low long-term rate could be a better option."
So what are the best deals?
If you're looking to a 0% deal, Virgin's credit card tops the tables as it offers a 16-month interest-free period on balance transfers, with a fee of 2.98%. If you don't clear your debt during the interest-free period you will be charged a standard rate of interest of 16.6%. Avoid spending on this card though as the interest-free period on purchases is only three months.
Other leading balance transfers deals include MBNA's Platinum Rewards card, the BT credit card and Nationwide's Gold card, all of which have 13-month interest free periods on balance transfers. MBNA's transfer fee is 2.9%, while BT and Nationwide charge 3.0%. Barclaycard Platinum has a lower fee at 2.5%, although the interest-free period on balance transfers is slightly shorter - it ends in November 2010.
Alternatively, if you have a NatWest, Royal Bank of Scotland or HSBC current account you can apply for their credit cards, all of which have 15-month interest-free periods for balance transfers. They also all charge a transfer fee of 2.98%.
You should avoid spending on all the cards mentioned above as the 0% offers on purchases are shorter than those on balance transfers (once the introductory offer on purchases had ended, you'll start accruing interest at the standard rate on any spending you've made).
If you want a card that you can continue spending on as well, the Halifax All in One card offers a nine-month interest-free period on both balance transfers and purchases. The transfer fee on this deal is 3.0%.
The other option is a card that offers a long-term low standard rate. Top of the tables in this case is Barclaycard's Simplicity. The card offers a manageable rate of 6.8% APR and does not charge a balance transfer fee.
Potential pitfalls
As well as shopping around, card holders will need to keep their wits about them when it comes to switching summer debt to the cheapest winter home. Watch out for the following potential pitfalls:
Payment hierarchy: This is when a card provider puts your monthly repayment towards the cheapest part of the debt first, leaving the interest-generating portion of the balance as fat as possible. Nationwide and Saga are two providers that nobly pay off the most expensive part of a credit card balance first.
Only for insiders: Be prepared for your switching options to be more restricted this side of the credit crunch. Some card providers, such as Royal Bank of Scotland and HSBC, now only offer 0% balance transfer deals to their existing customers. "This enables them to use their data to check how reliable a payer you are first," explains Moneysupermarket's Peter Harrison. Other providers, including Capital One, have pulled out of the 0% balance transfer market entirely.
Market monopoly: You may discover that you simply can't switch your summer hangover between cards anyway, warns Harrison. "The branding may be different on credit cards but actually MBNA owns around half the marketplace and will not allow card holders to transfer a balance from one card in the group to another." Virgin, Play.com and BMI are all examples of cards that are owned by MBNA.
A 'win win'...
But consumers have little to lose by shopping around for the best credit card that could offer them a 0% lifeline. Combined with the right planning and budgeting, the switch could put you back on an even keel in time for Christmas.
What's more, using your credit card will come with some distinct benefits. Under the Consumer credit Act, the card provider accepts joint responsibility alongside the retailer for goods and services costing between £100 and £30,000. This means that if an item is lost, damaged or stolen - or a service is not up to scratch - you can claim the full amount from the credit card company.
Ultimately though, this perk is best enjoyed when your credit card is back in its rightful place as your servant and not your master...
Please note: Any rates or deals mentioned in this article were available at the time of writing. Products underlined can be applied for directly.
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