Despite the low rates advertised for credit cards when transferring a balance, they could end up costing you more than a personal loan, according to online advisor Moneyfacts.
The consumer consultant warns that although the rates may appear more inviting if you borrow money on a low-rate credit card, unless you make significant and regular repayments it will work out more expensive over longer periods of time.
By continuing with minimum payments and stretching out the debt period, consumers are adding to their debt with interest that, although at a low rate, will mount up very quickly.
Lisa Taylor of Moneyfacts said: "A credit card balance transfer may offer a more competitive rate, but you have got to benefit by making fixed payments, in-line with loan repayments.
"It has to be someone very strict [to borrow large amounts on a card] and if you only pay back the minimum amount or a small amount it will end up costing you a lot more," she added.
Personal loans are available at competitive rates in the current market and can offer levels of interest that, although slightly higher than the average credit card rate, provide a more structured and disciplined alternative to paying off debt.To read more loans news, click here.
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