Credit card switch could save years of debt

Monday, January 16, 2006

Consumers are being urged to switch their debts from store cards to a low interest credit card by the comparison service uSwitch.com.

The online service is warning customers that store cards could end up doubling the cost of any purchase such is their high rates of interest, meaning a switch to a credit card would be beneficial.

"With many consumers concerned about how they are going to pay off their January spending sprees, especially those paid for on high-rate store cards, a way to ease some of the burden would be to shift their store card debt to a more competitive credit card," said Nick White, head of personal finance at uSwitch.com.

"With APRs on many store cards exceeding six times the Bank of England base rate, consumers can make significant savings by carrying a store card balance to a low-rate credit card, enabling them to pay off the debt many years earlier.

The comparison website uses the contrasting examples of the Toys R Us store card and the Lloyds TSB Advance cards, amongst others, to demonstrate its point.

The Toys R Us card, with its 29.9 per cent standard APR would take almost eight and a half years to pay off a £400 purchase. The Lloyds card, at 5.5 per cent standard APR, would take under five years.

Find credit card offers here:
http://www.europinions-finance.co.uk/credit-cards/credit-cards/