Tip to saving up to £1,420 on punishing credit card interest bills

New research has found that Britons who are being hit by punishing interest rates on credit card balances can save up to £1,420 - and turn around their finances - by making one simple move

New research suggests that Britons burdened with high interest rates on credit card balances could save up to £1,420 and improve their financial situation. Currently, 49.2 percent of all credit card users are paying interest on their borrowing every month, with many facing exorbitant interest rates exceeding 30 percent.

However, transferring balances to a new card that charges no interest could enable them to reduce the debt over a period of up to 29 months while making substantial savings. The number of these balance transfer card deals has decreased from 73 to 58 in the last two years, and the fees have slightly increased from an average of 1.99 percent to 2.42 percent.

Nevertheless, significant savings can still be made. Research by TotallyMoney revealed that someone currently paying interest on the average interest-bearing balance of £2,916 each month could save £1,421 by taking advantage of the market-leading 29-month balance transfer from Virgin Money, despite the hefty transfer fee of 3.45 percent, reports the Express.

A card with NatWest could offer the same typical customer an interest rate saving of £682, assuming the balance was paid down over 13 months, and there is no balance transfer fee. Another deal from Virgin Money, offering a balance transfer fee of 3 percent and a 16-month repayment period, could save a credit card user with an average balance around £752.

Alastair Douglas, the CEO of TotallyMoney, has some valuable advice for credit card users struggling with debt: "Anybody paying interest on their credit card debt each month should check their eligibility for a 0 percent balance transfer offer."

He elaborated that this approach can halt interest charges for up to 29 months, allowing individuals to focus on settling their debt and potentially saving a significant sum. .

Mr Douglas also mentioned: "The best offers will usually only be available to people with the best scores, so download a free personal finance app which gives you access to your credit report."

He underscored the importance of such apps, as they not only provide access to credit reports but also offer personalised plans to enhance credit scores and improve borrowing options. .

Mr Douglas advised action sooner rather than later due to the unpredictable nature of financial needs.

"When applying, you should always shop around for the best deals, and look out for offers which come with pre-approval, guaranteed credit limits, guaranteed rates, and guaranteed 0% offer durations. That way you'll know if you'll be accepted before you apply, and you can be totally sure that you'll get exactly what's advertised."

He further advised customers on making informed decisions. Lastly, he cautioned cardholders: "It's also worth remembering that a balance transfer is designed to help you stop paying interest, and it's likely that you'll be charged for using it for making purchases or withdrawing cash from the ATM. If you need access to both a 0 percent balance transfer, and 0 percent purchases, then check to see if you're eligible for any combo cards."

This reminder points out the potential costs associated with balance transfers and suggests seeking out versatile card options for additional benefits.

"Our free personal finance app gives you access to both your credit report and open banking data, and makes it work for you, not against you. We'll tell you what's holding you back, and the steps you can take to improve your score and unlock the offers. And we also notify you when your current 0 per cent introductory offer has ended, so you can shift to a 0 percent balance transfer and avoid paying interest."