Millions of Brits could cut £767.63 from their credit card costs with one move

Moving to a fee-free 0% balance transfer card could save the average UK cardholder £767.63 this year, new figures from money.co.uk show, with residents of Belfast able to save the most.

But despite the savings on offer, almost half of Brits (47%) have never moved their debts to take advantage of cheaper interest rates and just one in three (35%) regularly does.

That’s according to our latest Debt Index, that reveals four out of five Brits will start 2023 in debt.

The most common form of debt people admitted to was being held on their credit cards - with one person in three carrying a negative balance into the new year.

The average card debt worked out at £2,647 - which will attract £7,67.63 in interest at the current average APR of 29.9%.

But you can cut that bill to £0 by switching to a balance transfer card that comes with a 0% introductory fee - with the average fee-free deal lasting 14.19 months at the moment.

But people wanting to cut their costs do need to be careful of a couple of things.

1. Always check before you apply

Firstly, check how likely you are to get a card before applying.

Every time you make a formal application for credit, it gets recorded on your credit report for other lenders to see.

That means applying for, then being rejected, by a credit card provider actually makes you less likely to be accepted by the next one.

And applying for a string of cards at once to see which ones you’ll be able to get is about the worst thing you can do - as lenders will see all of your applications and could think you’re desperate for cash.

The good news is that using a card match tool or eligibility checker doesn’t count as a formal application - meaning they don’t hurt your chances of getting a different card if the one you’re aiming for is ruled out. 

2. Make sure you always pay at least the minimum amount

Secondly, make sure you’re at least making the minimum monthly repayments on your new card.

Missing a repayment could see you lose your 0% privileges, as well as hurting your credit score and resulting in a penalty charge.

Setting up a direct debit from your bank account to cover this as soon as you take out the new card is the simplest way to avoid the problem.

You can see how much a 0% card could save you with our credit card interest calculator.

3. Make a plan for when the 0% period ends

No 0% credit card period lasts forever, and while it makes sense to just pay the minimum amount while no interest is being added, it can also leave you with a chunk of debt left when the introductory period runs out.

At that point, you’ll start being charged interest again unless you clear the full balance at once or make a second balance transfer.

Ask for help as soon as you think you’ll need it

Finally, if you’re struggling - seek help as soon as you can.

Putting your head in the sand or ignoring bills is about the worst thing you can do for your finances.

There are also confidential, free and independent services available to talk you through your options - you’re even entitled to extra help meeting your bills and breathing space from repayment demands if things get too bad.

The following debt charities can also offer you independent advice and support:

• Citizens Advice can provide free help in person or by phone

• StepChange Debt Charity can provide advice or a free DMP

• National Debtline can offer free advice by phone and help you set up a free DMP

• PayPlan is an independent provider of free DMPs

• Shelter is a housing charity that can provide advice by phone, online or in person

• Christians Against Poverty can visit you at home to give advice and help you budget

The government-run Money Advice Service offers some simple steps to help with your debts.