Last half of 2007 saw credit card switching frenzy
According to a recent report the last six month of 2007 saw a significant rise in the number of people that decided to switch credit cards and providers in a bid to get a better deal on their plastic.
Although credit conditions have become tighter over recent months due to the global credit crunch many consumers still managed to switch cards and providers in the latter half of last year as they battled to get a better deal on their credit card and enjoy more affordable credit.
The report shows that nearly six million customers switched credit cards in the last six months of 2007, which reflected a rise of nearly 400,000 more people switching credit cards compared to the first six months of the year.
Around 12% of cardholders switched cards in the first six months of last year compared to 13% switching in the last six months of the year.
Younger cardholders aged between 25 and 34 found it particularly difficult to manage their finances, with around one in six stating that they had to switch provider to get a better and more affordable deal in the last half of the year.
One industry official stated: “The increase in credit card switching means that people are concentrating more on reducing debts and are less concerned about other product areas. And with bills increasing across the board it wouldn’t be a surprise to see further rises in credit card switching in the next six months as consumers struggle to cope.”
He added: “Credit card companies still offer lengthy zero per cent deals – some as long as 15 months – which means that so-called ‘rate tarts’ will be here to stay. The worry is that consumers will see a zero per cent deal as a chance to service debt rather than repay debt. That is a precarious situation as sitting on debt often leads to spending more elsewhere. It will almost certainly be the case that everyone can save money by switching – or at least stave off hefty interest payments – and we would urge consumers to continue to seek out the best deals.”
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