Zopa has today revealed the real cost of 0% balance transfers that affect millions of credit card holders in the UK. Results from our #BacktoBlack report compiled by personal finance expert Mike Naylor, reveals the pitfalls, ongoing debts and unexpected costs of using credit cards.
The #BacktoBlack campaign highlights the issues facing millions of consumers when it comes to expensive credit card debt and charges. We think that credit cards can be a useful tool but overall, millions of people end up in a vicious debt cycle with their credit cards, often paying thousands in interest and never pay off the card’s balance. We think that consumers looking to pay off their debts should be given a fighting chance by having fixed low interest rates and the ability to pay off early at no extra charge.
Below are some of the key stats from the #BacktoBlack report which make for some staggering reading.
- £810 million – the shocking amount paid in balance transfer fees in the UK
- Nearly half (49%) of credit card 0% balance transfers are not repaid within the 0% period
- A quarter of people who own credit cards and store cards have been building up their debt over five years or more
- The average UK resident carries debt of almost £10,000
- Almost a third (£2,855) of this is attributed to credit cards
- 16 million credit card and store cardholders don’t know how much their card charges for purchases if their bills are not repaid in full.
Giles our CEO had this say about the issue, “It’s clear that consumers who have credit card debts will struggle to become debt free and end up carrying sizable debt for a number of years. Credit card companies know full well that around half of customers may not pay off the full amount and are betting against you to fail from the start.” He continues, “Consumers need to stop thinking of “loans” as a dirty word. Loans and credit cards are both forms of debt, but loans can be much cheaper than credit cards, especially for millions people that struggle to pay off their credit cards. Zopa has helped thousands of borrowers become debt free by providing low cost loans from as little as 4.4% Rep APR. We think consumers deserve an affordable monthly payment plan and an option to pay off early at no extra cost in order to get back-to-black.”
If you have been affected by credit card debt or had a 0% balance transfer revoked please leave a comment below and feel free to share this post: