Balance transfer credit cards ‘could help decrease debt size’

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Britons should look into the possibility of taking out a balance transfer credit card, according to lovemoney.com.

Britons should look into the possibility of securing a balance transfer credit card if they are struggling with their finances, it was suggested on Wednesday (January 6th).

Many households are currently weighing up their options now that the new year is well underway after accumulating excessive debt over the festive period.

Ed Bowsher, head of consumer finance at lovemoney.com, admitted that the prospect of rearranging commitments can be daunting, particularly with so many choices available.

However, he explained that securing a balance transfer credit card to shift debts – even if they are on a different card – could be a useful short-term measure to ease some pressure.

He said: “If you have got a credit card at 17 or 20 per cent, try if possible to get your consumer debt onto the lowest interest rate as possible.

“Whether that is a nought per cent credit card or the best personal loans at about eight per cent, try to pay it down as fast as you can.

“The rates you will be paying will rise over the next couple of years so to get that debt as small as possible as quickly as possible is the best way to go.”

Mr Bowsher added that consumers are sometimes unaware of how damaging their high-interest credit card deals can be, as they do not realise how long it would take them to settle their balances with minimum monthly repayments.

Meanwhile, new figures released this week by creditaction revealed that total UK personal debt stood at £1,459 billion at the end of November 2009, which was a 0.7 per cent rise from 12 months earlier.

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