Credit crunch has minimal impact on credit card transfers : Credit Card Guide

Credit crunch has minimal impact on credit card transfers

According to a recent report the global credit crunch, which has resulted in severe problems in the UK money markets, has not had that much of an effect on the level of credit card transfers. The report shows that every month many thousands of consumers are trying to transfer their card balances every month despite the chaos that has ensued as a result of the credit crunch. In fact, it is estimated that close to three quarters of a million borrowers try to transfer over one billion pounds worth of debt each month in a bid to try and save money on interest.

The data shows that many people who are struggling with higher interest debts such as those on standard credit cards are now trying to reduce their outgoings by transferring to a low interest or 0% interest balance transfer card. However, research also shows that many may now find this process difficult or even impossible, as many credit card providers have severely restricted lending in light of the credit problems, and have really tightened up on their lending criteria.

One official involved in the research stated: 'There is a significant market for cards offering balance transfers as our research indicates that 40% of card holders think it will take longer than one month to clear their current balance.' The study involved surveying around one thousand people. It found that whilst the average amount being transferred to another card was around £1555, there were some consumers that were transferring over £4000.

Whilst consumers that transfer balances from higher interest credit cards onto a 0% balance transfer card can save on interest, they should be mindful that there is a 2-3% transfer fee to pay in most cases, and also that availability of these cards is vastly reduced compared to a year ago, which means some may find that they cannot get a transfer card.

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