- Surge of balance transfers expected between 9-10pm on 20th January 2014 -
- January revealed as most popular month of the year for balance transfers*
- Nearly one in ten credit card holders (9%) have already carried out a balance transfer so far this year
- Nearly two thirds of credit card holders (62%) spent up to £1,000 on their credit card in the run up to Christmas
- One in 25 (4%) will resort to payday loans to compensate for their Christmas spending perpetuating the cycle of debt
A surge in the number credit card balance transfers is expected this Blue Monday (20th January) between 9-10pm as consumers tackle their Christmas financial hangover head-on, according to new research from Confused.com.
Based on research* and credit transfer trends recorded over the previous 3 years**, the leading price comparison site can reveal that January is the most popular month of the year for balance transfers, with nearly one in 10 (9%) already having carried out a balance transfer so far this year*.
This may well be down to the fact that people traditionally spend on a credit card before Christmas to fund the festive expenses. This can often lead to a financial hangover in the New Year as the funds clear from current accounts or are rolled over into interest payments over the year.
According to the findings from, nearly two thirds of credit card holders (62%) spent up to £1,000 on their credit card in the run up to Christmas. As a result, almost a fifth (17%) of credit card holders said they are now planning to cut their spending on food to help repay their Christmas debts, and almost a quarter (23%) are thinking of cutting down on leisure and holidays. Worryingly, nearly one in 20 (4%) say they will resort to payday loans to compensate for their Christmas spending, perpetuating the cycle of debt.
The findings also reveal that millions of people who currently pay interest on their credit cards could be paying over the odds for their debt. Over half of credit card holders (61%) admit to not transferring balances even though they may be paying interest. Their main reasons for doing so are because they think it’s too complicated (14%), they don’t know how to do it (10%) or because they think it’s not worth it (15%).
This highlights a startling lack of awareness, as a 0% interest balance transfer card could help people save money, with more than 80 cards currently available offering over 12 months 0% on balance transfers, with some even offering a 30 month interest free period.
Moving a credit card debt or in some cases, an overdraft to one of these cards, can buy consumers time to clear the balance without having to pay interest on top. On average people have transferred nearly £1,500 to help ease the strain of their debt, with one in five (19%) transferring a credit card balance three times or more.
Nerys Lewis, Head of Credit Cards at Confused.com comments:
“If consumers have spent a little too much on a credit card in the run-up to Christmas, they should act now before it becomes a costly debt. For those who cannot afford to repay the full balance when it's due, it’s well worth considering a balance transfer card. Here, the entire debt can potentially be switched to a credit card with 0% interest for up to two years or more in some cases.
“We’d recommend that people shop around to try and find one of the many balance transfer credit cards that are currently on the market that best suit their needs – it could prove to be the perfect cure to the New Year financial hangover.”
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Notes to Editors:
* OnePoll, January 2014
** Credit balance transfer data collected by confused.com between 2011-2013
All figures, unless otherwise stated, are from One Poll and commissioned by Confused.com. Total sample size was 8127 GB adults aged 18+. Adults with poor credit rating sample size 978. Fieldwork was undertaken between 16th to 24th October 2013. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
Confused.com press office:
Confused.com was the UK's first price comparison site for car insurance. Confused.com is one of the UK’s biggest and most popular price comparison services. Launched in 2002, it generates over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include home contents insurance, travel insurance, pet insurance, van insurance, motorbike insurance, breakdown cover and energy, as well as financial services products including credit cards, loans, mortgages and life insurance policies.
Confused.com is not a supplier, insurance company or broker. It provides an objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com’s service is based on the most up-to-date information provided by UK suppliers and industry regulators.
Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is regulated by the Financial Conduct Authority.