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M&S: Switch cards, then clear debt

10 January 2007
Consumers are wising up to the advantages of switching cards for cheaper interest rates – but failing to clear their debt during the initial offer period, M&S Money warns.

Over half of Britain's credit card holders have now switched a balance from their existing card to one with a cheaper introductory rate on at least one occasion.

"Britain's borrowers have caught the balance transfer bug," notes Eddie Nott, M&S Money's deputy chief executive.

But only 36 per cent clear their debts by the time their new credit card reverts to its standard rate.

Almost three-quarters of the debt on any credit card is still owed at the end of an introductory interest-free period.

Split by gender, men transfer larger balances but find it hardest to repay debt, clearing only £17.50 of every £100 they transfer during the introductory period. As a result, over 80 per cent of their debt reverts to a standard higher interest rate, whereas women pay off on average £27.70 per £100 transferred.

Mr Nott urges borrowers to "opt for lifetime balance transfer offers unless they are confident they will repay their borrowings while it's cheaper to do so".

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