Credit card owners urged to spend wisely

UK consumers could take advantage of competition between credit card companies and benefit by a collective £8.5 billion, finance experts have claimed.

According to figures released by the price comparison website moneysupermarket.com, the average UK household is likely to have a credit limit of £6,000, borrowers are able to take up several lenders’ offers of zero per cent on all purchases for up to 12 months and put this money into a savings account.

This "trick" could earn borrowers up to £270 a year, based on a current account with a six per cent rate of interest.

"Using a credit card with a zero per cent purchase offer and investing the equivalent amount of money in a savings or current account is an extreme case of banks paying us for our business," said Rob Kenley, head of credit cards at the website.

"The process of getting your hands on some of that cash is simple."

This method of finance management, which is offered by, amongst others, HSBC and the Halifax with its One Online Special, is, however, only effective if borrowers clear their balances every month.

However, according to the new report from MoneyExpert.com, credit card customers in the UK have missed out on more than four million payments over the last six months, with penalty charges of £12 likely to be issued by the lenders.