In his keynote speech to the Conservative party conference yesterday David Cameron said that everyone is working hard to pay off their credit and store card debts.
For many people that's easier said than done but according to Jeremy Cryer, head of credit cards at comparison site Gocompare.com, Brits could make a good start by switching credit and store card debts to a 0% balance transfer deal or a low rate deal for the lifetime of the balance.
Jeremy Cryer said:
"The collective UK credit card debt is around £60 billion and much of that will be racking up interest at the card issuers standard APR of around 19%.
"A great way to start tackling your debt is to transfer your debt balance to a card with an extended interest free period.
"You will usually have to pay a small balance transfer fee of around 3% which will be added to the debt initially but if you can get 0% interest for 22 months it's still well worth it.
"Another option is to switch your balance to a card with a low rate for the lifetime of the balance you transfer. This will give you a reduced interest rate straight away and you will remain on that rate until your debt is completely paid off.
"This may be a better option if you're unlikely to pay off a significant part of your debt during a 0% interest free period. For example, the Barclaycard Platinum Simplicity card offers a market-leading low rate of just 7.9% APR.
"Remember that in most cases any new purchases you make using a credit card will be charged at the card issuer's standard interest rate until it's paid off so it's a good idea once you've switched your balance to keep that card purely for the benefits of the 0% or low rate deal.
"It's also worth remembering that if you only ever make the minimum repayment on your credit cards it can take you up to 34 years to pay off the debt if you have a balance of £5,000. Try to fix a monthly repayment above the card issuer's minimum that you're comfortable paying and you'll pay off your debt much quicker."
