13m miss out by sticking with same credit card
Research by comparison site, MoneySupermarket.com, revealed only 9% of credit card users plan to switch cards in the next six months, while 66% stated it was unlikely they would to change to another provider.
Moneysupermarket says the longer a credit card user has held their card, the less likely they are likely to switch; on average, for those who have had a card for 10-15 years, only 4% are likely to switch in six months’ time, compared to 26 % of those who have had their current credit card for only a year.
Kevin Mountford, head of banking at MoneySupermarket.com, said: “Apathy certainly reigns with many credit card holders who are happy to languish on high interest rates with their existing provider.
“As a result, the tempting offers which will have initially swayed people to that credit card are likely to have changed or expired over time.
“Bank of England figures show the average credit card rate in the market is 17.32%, up from 15.7% in November 2006 so anyone holding a credit card for a longer period of time is certainly paying over the odds and are failing to take advantage of some of the best deals currently available in the market.”
The main reasons as to why consumers have stayed loyal to their credit card provider are that 22% have not thought about switching, while a further 16% ‘can’t be bothered to switch’.
A quarter state that the reason for sticking with their current provider is down to good customer service, and a further 18% do so because they trust their current provider more than others.
A recent poll found one in ten consumers plan to put Christmas spend on their credit or store card this year, something which could prove to be very costly if they haven’t switched providers for a number of years.
Moneysupermarket says switching your credit card could help you save a packet simply by searching for the most competitive deal.
For example, for someone who has a £2,000 balance sitting on a card paying an average rate of 17.32%, switching to a market leading zero per cent balance transfer credit card with Barclaycard for 24 months could save them a substantial £423 in interest.
For those who use their card for regular purchases, and don’t pay the card balance off in full every month, switching to a zero per cent purchase card may be beneficial.
For card users who pay their balance off in full every month, then a reward or cashback card may be more suitable such as the market leading American Express Platinum Cashback card which pays 5% cashback for the first 3 months and 1.25% thereafter.