January balance transfer boom

Half of credit card customers urged to cut interest payments and save £1,533..

Every January, hundreds of thousands of credit card customers get their finances in shape, and cut interest payments with a balance transfer. Last January alone, there were 853,000 balance transfers, a 19% increase when compared to the average across the rest of the year*.

TotallyMoney CEO, Alastair Douglas:

“January’s a great time to get your finances in shape, so you can start the year on the front foot. This might include setting up a savings goal with a bank who’s offering a competitive rate, making the most of a current account switch offer, or cutting interest costs with a balance transfer. And with two banks now offering up to 31 months, you could press pause on interest payments until August 2027. Finding out if you’re eligible for an offer doesn’t take long, and it could save you hundreds if not thousands of pounds.”

Research also shows that half (49.4%) of credit card customers could benefit from a balance transfer, as they’re paying interest on £33bn worth of borrowing. While the total amount of debt has increased by 6.6% in the past year*.

With a balance transfer, eligible customers can shift their existing debt to another provider, and for a small fee (usually 2-4%) they can cut interest payments for a set amount of time. In recent weeks, competition has warmed up, with the duration of 31 months now available from two providers —  the longest since April 2023†.

The table below highlights how the market-leading MBNA 31 month offer (with a 3.2% fee) lets a customer carrying the average balance of £2,916 save £1,533. The Barclaycard option charges a 3.45% transfer fee, saving the average customer £1,526‡.

Barclaycard also offers a zero fee option for 14 months, saving £734, while those with less than perfect credit scores could make the most of a 16 month Virgin Money balance transfer, or the 9 month option from Fluid‡.

TotallyMoney CEO, Alastair Douglas:

“The longest offers will usually be made available to people with the best credit scores, so download a personal finance app and check yours for free. If it’s not quite perfect, you should be given a personalised plan to get yourself financially fit for the new year. When applying, shop around, and keep your eyes peeled for offers which come with pre-approval, guaranteed credit limits, guaranteed rates, and guaranteed 0% offer durations. That way you’ll know if you’ll be accepted before you apply, and you can be totally sure that you’ll get exactly what was advertised.”