Consumers are still transferring balances from credit cards

The financial news is regularly dominated by the doom and gloom that the credit crunch has brought with it, but according to a recent report many consumers are still continuing to make the most of 0% balance transfer cards despite the effects of the global credit crunch.

Research was recently carried out by Sainsbury’s Finance, and showed that over the next three months around 4.3 million cardholders would be transferring balances off higher interest credit cards onto a 0% balance transfer credit card, with a total of £6.68 billion expected to be transferred from existing credit cards.

A Sainsbury’s official said: “Our research shows that there are an estimated five million people with outstanding balances who are not only incurring interest but also admit that it may take them longer than one month to clear their spend.”

However, consumers should bear in mind a number of problems that could stand in their way. Tighter credit conditions means that some consumers may not be able to get a 0% balance transfer credit card, and there has also been a reduction in the number of balance transfer cards that offer capped transfer rates, which could make the whole process more expensive.