Missed balance transfers cost £1.7bn
Ever wondered how credit card companies make a profit off 0% balance transfer deals?
New research from financial comparison site moneysupermarket.com has estimated that nearly 1 in five would-be ‘rate tarts’ fail to move their balance to a new card before their introductory offer ends, and this failure costs a collective £1.7bn in interest each year.
The research shows that the average time spent paying interest unnecessarily before finding a new deal is seven months, with the average level of interest set at around 16.5%.
Other findings of the survey include the perhaps predictable fact that very few people who transfer a balance onto a new card manage to clear it completely before the 0% deal expires, with only 85% of borrowers either ending up paying interest on some of the balance or moving it to a new card.
April 4th, 2010 at 11:05 am
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