Caution urged when switching credit cards

Written by Editorial Team

10 May 2006

Consumers are being warned to choose their credit cards carefully if they are tempted to switch debt to cards with limited zero interest rate periods.

New research from Capital One shows that more than half (57 per cent) of credit cards have introductory interest-free periods but 40 per cent of cards only extend the privilege for six months.

Spokesman Justin Basini said that this variation means zero per cent balance transfers “may not be long enough for some people”.

The poll of 1,109 adults in April also ascertained that the average amount people are planning to transfer to a new credit card in the next six months is £2,061. Collectively, this will amount to almost £12 billion switched by nearly 6 million people.

Of these, some 2.4 million people are planning to transfer £1,000 or less between cards between April and September this year, with 693,000 planning to move more than £5,000.

However, less than half (43 per cent) of those who transferred a credit card balance in the past five years found they were able to clear it in less than six months. The average time taken was ten months.

To read more about credit cards, click here.