Experian Data Shows Over £1,300 Potential Savings for Credit Cardholders by Switching to 0% Balance Transfer Cards

Experian Data Shows Over £1,300 Potential Savings for Credit Cardholders by Switching to 0% Balance Transfer Cards

(IN BRIEF) Experian’s latest research indicates that over 10 million people with credit card debt could save up to £1,391.69 annually by transferring their balances to a 0% balance transfer card. The data, based on an analysis of 3 million credit card holders, also shows that opting for a debt consolidation loan could save significant amounts, particularly for those with larger debts. Experian’s report highlights that pre-approved eligibility for debt consolidation products has increased, especially for individuals with lower credit scores. The study underscores the importance of debt management strategies, with the added availability of innovative debt consolidation tools like Paylink’s ReFi™ solution, which simplifies repayment processes.

(PRESS RELEASE) DUBLIN, 30-Jan-2025 — /EuropaWire/ — New research from Experian highlights that over 10 million people currently carrying credit card debt with interest could save an average of £1,391.69 annually by transferring their balances to a balance transfer (BT) card offering a better deal. The study, which analyzed more than 3 million credit card holders, found that individuals with a typical balance of £3,109 could avoid substantial interest costs by switching to a 0% BT card for a 29-month period.

With the Bank of England’s average credit card APR standing at 21.4%, those making £100 monthly payments could save £1,391.69 in interest by switching to a 0% BT card. Additionally, the research shows that opting for a debt consolidation loan may lead to significant savings. For example, customers with a £7,500 credit card balance at an average APR of 21.54%, making the minimum payment, would take nearly 39 years to clear their debt, paying £13,390 in interest. However, by consolidating this debt with a five-year loan at an APR of 5.9%, the total interest paid drops to £1,146.60, representing savings of up to £12,243.40.

Experian also reported an overall 9% increase in pre-approved eligibility for debt consolidation products on its credit comparison marketplace from January to December 2024. Notably, eligibility for those in the lowest credit score band rose by 21%, providing increased access to credit options for those most affected by the tightening lending environment.

John Webb, Consumer Affairs Expert at Experian UK&I, emphasized, “As people look ahead and plan their finances for the year, now is an ideal time to consider managing debt more effectively. With many lenders offering new deals, including longer balance transfer terms, consumers could unlock significant savings by switching credit products.”

Webb also encouraged consumers to review their eligibility before applying for new financial products and to seek advice from free debt services such as National Debtline or StepChange if they are struggling with payments.

The data comes at a time when Experian has also added Paylink’s ReFi™ solution to its platform. This innovative tool consolidates various forms of debt, such as credit cards and personal loans, into a new loan with better terms, streamlining the repayment process and potentially easing financial strain for consumers.

Note to Editors

[1] Data from Experian’s bureau analysing customers eligible for debt consolidation products from January 2021 – November 2024

[2] Calculations by Experian Marketplace based on the following points:

·       Balance Transfer cards – savings claim is based on Experian’s bureau data that shows £3109 as the average statement balance per person in the UK. 29-month Balance Transfer card comes with a typical 2.4% transfer fee.

·       Debt consolidation loan – savings claim is based on Experian data showing £7,500 as the approximate average loan size requested. 5.9% APR is the rate at which the cheapest loans are available

[3] Eligibility improvement data is a comparison of average pre-approved eligibility on Dec 1st 2024 vs January 1st 2025

About Experian

Experian is a global data and technology company, powering opportunities for people and businesses around the world. We help to redefine lending practices, uncover and prevent fraud, simplify healthcare, deliver digital marketing solutions, and gain deeper insights into the automotive market, all using our unique combination of data, analytics and software. We also assist millions of people to realise their financial goals and help them save time and money.

We operate across a range of markets, from financial services to healthcare, automotive, agribusiness, insurance, and many more industry segments.

We invest in talented people and new advanced technologies to unlock the power of data and innovate. As a FTSE 100 Index company listed on the London Stock Exchange (EXPN), we have a team of 22,500 people across 32 countries. Our corporate headquarters are in Dublin, Ireland. Learn more at www.experianplc.com.

Media Contact:

Eliza Odire-Boadi
Consumer PR Manager
Experian UK&I
Tel: 07816192572
Email: eliza.odire-boadi@experian.com

SOURCE: Experian