Barclaycard, MBNA, Lloyds, Virgin and Tesco offer could hand you £1,300

A man holding UK £20 bank notes
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More than 10million people in the UK who have a credit card could save £1,391.69 in interest payments every year by switching their existing balances to a balance transfer card (BT card) with a better deal, according to new data from Experian. On average consumers hold a balance of £3,109, so a customer with the Bank of England (BoE) average APR of 21.4% making monthly payments of £100 could save over £1391.69 in interest payments by transferring their balance to a 29-month 0% BT card.

Depending on the balance a customer is carrying on their credit card, if they opt to take out a debt consolidation loan they could make considerable savings in interest payments. For instance, £7,500 is the average amount people apply for a debt consolidation loan.

A customer carrying a balance of £7,500 on a credit card with interest and the average BoE APR of 21.54% and paying the minimum payment of 3.5% would take 38 years and 10 months to clear the balance, which would cost them £13,390 in interest. However, a five-year personal loan taken out with a representative APR of 5.9% would result in a monthly payment of £144.11 and total interest payable of £1,146.6 - resulting in a potential saving of up to £12,243.40.

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John Webb, Consumer Affairs Expert at Experian UK&I, said: “As people start to financially plan for the year ahead, now is one of the best times to explore the options available for managing debt. Lenders often introduce a variety of new deals, such as longer balance transfer or purchase durations. Our latest data reveals that switching to a balance transfer card or consolidating debt could lead to significant savings.

“There are many ways to get on top of existing debts, so it’s good to research and find the option that fits best. Before applying for a product, we urge people to check their eligibility first and have a plan in place to pay off as much of their debt as possible before any promotional periods end. If you're struggling to make the monthly payments on any accounts, then it’s a great idea to speak to a free debt advice service such as National Debtline, Christians Against Poverty, or StepChange.”

Consumers looking to better their finances this month could benefit from brand new and longer deals available, such as with the top three longest 0% balance transfer deals currently available on Experian’s credit comparison marketplace, including Barclaycard 31 months, MBNA 30 months, and Lloyds, Virgin and Tesco 29 months.