Experian has shared an important update which reveals that UK consumers may switch and save £672 annually as lower interest credit returns in 2024.
According to a blog post by Experian, savvy Brits are already “taking advantage with searches for balance transfer credit cards up 8% year-on-year.”
Experian further noted that pre-approved eligibility is “up 11% in January vs December, making now a much better time to search for lower interest deals.”
Experian also mentioned that the average cardholder could “save £672 a year by switching their existing balances to a balance transfer card (BT card).”
New analysis from Experian shows that “despite limited credit options in recent months, now may be an ideal time to switch, with eligibility for debt consolidation products increasing by 11% from December to January.”
Pre-approval rates for those in lower score bands “have increased by 25% on average, meaning that those most impacted by the tightening lending environment now have increased access to credit options. For those looking to save money on existing borrowing or even pay off their debts quicker, Experian data suggests that the average credit card holder could save £672 a year on average by switching their existing balances to a 0% balance transfer card.”
Many have taken advantage of these changes “as searches for debt consolidation products have increased by 8% compared to January 2023, accounting for 33% of all searches on Experian’s marketplace.”
For those facing increased financial strain “following Christmas spending, new analysis from Experian reveals that January is one of the best months to search for debt consolidation products. On average consumers that use the Experian marketplace are seeing 0% deals lasting 1.5 months (or 6 weeks) longer than in December.”
Consumers looking to better their finances this month “could benefit from brand new and longer deals available, such as Barclaycard’s 29 month 0% Balance Transfer Card (with £20 cashback), Santander’s 28 month 0% Everyday Long Term Balance Transfer credit card and HSBC’s 27 month Balance Transfer credit card which are all available on the Experian website.”
James Jones, Head of Consumer Affairs at Experian said:
“January is one of the best times for people to search for new debt consolidation options as lenders offer a variety of new deals, such as longer balance transfer or purchase durations. Our data suggests that people are starting the year off on the right foot, exploring ways they can pay off their debt quickly by reducing the amount they spend on interest. The festive season can be expensive. As people look to plan their next holiday and save for exciting plans in the year ahead, it’s important to think about how any credit can be repaid back, in line with your circumstances and goals.”
As noted in the update:
“We always encourage people to first check their eligibility for a product before making an application, as searches don’t affect your credit score. And if you are struggling with a debt repayment plan or would like support with an approach then we recommend contacting a free debt advice service such as National Debtline, Citizens Advice or StepChange. Talking to a debt adviser does not affect your credit score and the sooner you seek help the better.”
James Jones also shares his five tips to “help you maximize the benefits of debt consolidation to kick start the new year on the right foot.”
All data referenced is Experian data, 1st – 10th January 2022.
Eligibility improvement data is “a comparison of average pre-approved eligibility on Dec 1st 2023, vs January 1st 2024.”
Saving claim is based on Experian data showing “that the average credit card balances per person in the UK are £2,870, with an average APR of 27.5% according to Experian marketplace data (average based on period between September 1st 2023 to Jan 1st 2024).”
With a typical 1.4% balance transfer fee and assuming that the minimum repayment of 5% is met each month, the average saving “on interest repayments over 12 months would be £672 per individual.”
Lower scorebands include Poor, Very Poor and Fair scorebands.