By admin | January 21st, 2009 | Credit Cards
According to industry officials the number of credit card applications over the month of January are set to increase, as a rising number of people try and switch their cards in order to cut back on the interest that they have to pay on the balance that they have accrued over the Christmas period.
With many people having used their credit cards to fund purchases for Christmas and in the early High Street sales over recent weeks, many will now be preparing to receive their statements and will be hoping to switch to a lower interest card.
Officials have said that many consumers are keen to try and start the year with as little debt as possible, and part of their strategy may be to streamline their debts with a low interest credit card or an interest free balance transfer card. This is likely to result in higher levels of credit card applications. With households facing increasing difficulties due to difficult credit conditions and rising unemployment more and more people will want to try and cut their credit card debt.
Some officials have also said that a rising number of people may find that they struggle to make the repayments on their credit card balance, and that those in this situation need to seek professional advice as quickly as possible.
One official stated: ‘Many people will look for a new start in the New Year and getting finances in order will be top of the list. If you feel your borrowing is out of control or you are concerned about servicing debts or slipping in to arrears, seek advice.’
However, those that want to try and switch to another card will have to act quickly, as many credit card companies are being increasingly careful about their lending.
One expert stated: ‘The market will contract further. This will be bad news for borrowers who have got used to regularly moving their card debt around. The best advice is to act quickly.’
Tags: credit card applications
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Transferring credit card debt won’t help people who have large balances as these are usually “teaser” rates, which means the low rate is good only from 6 months to a year.
People also need to read the fine print since sometimes there are high fees involved.
Comment by Ann — January 27, 2009 @ 2:20 am