With Christmas now behind us and many consumers looking to consolidate their debts, MoneySupermarket.com analysis shows that hundreds of pounds can be saved by moving to the best zero per cent credit card deals on the market.*
Those unable to pay off their debt quickly and looking to spread the repayment costs over a period of time should ensure they have moved their outstanding credit card balance to a new zero per cent balance transfer card to potentially save hundreds of pounds in interest. For example, by moving an existing £3,000 debt to the market leading 24 month balance transfer card from Barclaycard and repaying £125 per month over the interest free period, a huge £702 can be saved in interest compared to sticking to an existing card with a market average rate of 18.41 per cent APR and paying the same £125 a month.
Tim Moss, head of loans and debt at MoneySupermarket, said: "For consumers still struggling to pay off their existing credit card balance, now is the time to act and move it onto a cheaper deal to help save hundreds of pounds in interest. Moving onto a zero per cent interest product is a no brainer - it allows you to pay off your existing balance over time without accruing additional interest. It is important to think about how you plan to pay off the debt and budget accordingly otherwise you could find yourself still paying off your debts when the promotional offer comes to an end. Also make sure you set up a direct debit for at least the minimum repayment as missing a payment would result in you losing the promotional deal.
For many a personal loan may be a better option, especially if you cannot afford to repay the outstanding debt over the term of the best promotional offers available. If a new credit card or personal loan is not available to you, then focus on repaying the debt with the most expensive interest rate first as this is likely to be costing the most, but maintain at least the minimum repayments on each debt. If your debts are unmanageable then speak to your provider or seek immediate help from one of the free debt advice services such as Citizen's Advice or The Consumer Credit Counselling Service (CCCS) who will be able to offer help and advice. If a Debt Management Plan is right for you then ensure you choose a DEMSA accredited provider."
Those consumers looking for a personal loan to repay their debts will have to pay more for the privilege but can fix their loan repayments over a longer period. For example, borrowing £3,000 over 3 years would cost £99.79 per month with Sainsbury's Finance but you would pay a rate of 12.9 per cent and £592 in interest over the term of the loan.
Tim Moss added: "If you are unable to switch to a better deal, take the time to assess your outgoings and find ways to pay off the debt as quickly as possible. Reviewing all of your outgoings and seeing where you can make savings can really help free up cash which can be used to pay off your debts. In fact, families can save £1,000 on all of their household bills by using our site - including energy bills, home and car insurance."
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Notes to editors
* Compared to making a £125 monthly repayment on a credit card with a balance of £3,000 with an industry average APR of 18.41per cent
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