Following on from our last poll, this month we are interested in finding out how many of you managed to transfer your credit card balance during January 2009.
Your answer may be a simple ‘Yes’ or ‘No’, or you may have meant to transfer a balance but didn’t get round to looking in January.
On the other hand, you may not have any debt on your credit card to transfer over to a 0% offer.
No matter what the answer, we would love to know, so have your say and vote in our new poll here.
Results from the December 2008-January 2009 compareandsave.com poll have shown that a massive 82% of the people that took part plan to move debt from their existing credit card to a new one with a balance transfer offer in the first month of the New Year.
Of the 82% of respondents, 68% said they planned to move their balance to a 0% balance transfer offer. The remaining 32% revealed they were looking to balance transfer to a long-term low-rate offer.
The remaining 18% of voters said they were going to stick with their existing card, with 10% choosing to pay minimum repayments and 8% opting to pay their debt off in one lump sum.
Click the link to compare credit cards
You can now earn up to 4.65% AER with an ICICI Fixed Rate Savings Account, if you can leave your money untouched for at least 12 months.
You will be able to choose from a fixed period of 6, 12, 24 or 36 months and will need at least £1000 to open an account, but there is no maximum limit on how much you can invest.
Once the end of the fixed term period has been reached, you will be paid the interest you have earned on the savings account.
What’s more, you can manage your account online and the interest rate you are given will be fixed for the length of time you choose to keep your money invested when you first open the account. This means your rate will stay the same even if the Bank of England Base Rate falls any lower.
Click the link for more information about the ICICI Fixed Rate Savings Account
Yesterday we published the results of our December-January poll which asked compareandsave.com readers what they were planning to do with their credit card balances at the start of 2009.
In this new type of blog, we will go through the results of the most recent poll and analyse what they could mean.
The first point to note is that ‘balance transfer to a 0% offer’ was the most popular response with 56% of the votes. On first seeing the data, it would not be unreasonable to predict that this would have been a lot higher a year ago.
This leads us on to the reasons why it’s probably lower this year.
Firstly, the number of 0% balance transfer offers on the market has decreased over the past few months, admin fees have gone up and the length of offers has come down.
Secondly, a new type of credit card has become more popular in recent months – the low rate credit card – which offers a low APR on balance transfers for around two or three years and much lower admin fees. Although these cards have been around for some time, their availability only really started to increase in the last few months of 2008.
This was the second-most popular response with 26% of the votes. It is likely that a year ago, when low rate credit cards weren’t really established, this 26% of responses would have been given to ‘balance transfer to a 0% offer’.
It is also possible that some of these customers have not been lured away from 0% balance transfer offers but instead have opted to apply for low-rate credit cards in place of standard loans for smaller borrowing. A year ago, a good typical APR on a loan would have been around 5.9%. Today this figure stands at around 8.0%. However, in order to get the typical APR on a loan, you normally need to borrow at least £7,000.
They are also a popular choice for consumers who want to have the reassurance that they don’t have to change their credit card every 12 months and pay three admin fees instead of one.
This leads us to what the results may look like in 12 months’ time.
It is feasible that credit cards with ‘long-term low-rate offers’ will really increase in popularity over the coming year. It wouldn’t be shocking to see them become as popular as 0% balance transfer cards as people try to lower the amount they pay in admin fees and rid themselves of the need to switch cards every 12-16 months.
However, 0% balance transfer offers will certainly remain a popular choice for some consumers, especially those that want to sign themselves up for paying off their card debt over the period of a year to 16 months.
Prepaid ‘credit’ cards are a new concept in the world of personal finance and are based on the same functional principle as a mobile phone top up card mixed with a standard credit or debit card.
You start out by comparing prepaid cards and then applying for the one you choose. You will need to pay an initial fee for your prepaid card. This is to cover the actual cost of the card and the administration that goes into setting up your account and will usually cost you around £10.
Once you have received the card you will then need to load it with ‘credit’ and you do this in much the same way as you would with a mobile phone top up card. You take your card to any UK Post Office branch, to certain high street bank branches or to a PayPoint outlet and ask the cashier to top up your card by the amount you require. You hand over the card and the money and then the ‘credit’ will be applied to your card.
You can also have your salary or wages paid directly to your prepaid card and choose to store as much of this money as you like off your card in your online account.
The next step is spending your money, which you can do using the card in store, online and abroad. You can even set up standing orders and direct debit payments to come from your card on set dates each month. Once you have paid for an item, the money is taken from your card immediately.
You can also withdraw cash from ATMs all over the world using your card. To do this, you enter your card into the ATM, enter your PIN, which you will get when you receive the card, select ‘Cash’ and choose the amount you want to withdraw.
Some cards offer cash back when used online (some offer 15% cash back) and you will have the ability to check your balance 24 hours a day by text, online, by phone or via your mobile phone internet.
Click the link for more information on prepaid cards
You can now compare Prepaid Cards on compareandsave.com.
Prepaid cards, a card-based payment method, have become more prevalent and more popular in recent years and work in a similar way to a credit or debit card.
We are currently offering some prepaid cards on the site and will hopefully be offering more in the near future.
The Tuxedo Prepaid Card, which can be used at over 1.2m ATMs across the world, comes with £5 free when you first top up the card with at least £50 within 14 days of the card being activated.
What’s more, you can receive your wages directly onto the card and will earn 15% cashback when you use it to shop online.
The Cashplus Prepaid Card can be topped up for free at over 14,500 locations and offers online account management.
Plus, you will have the choice of adding ‘Credit Builder’ to your account at no extra cost, which will help you build your credit rating. You will still not need to be credit checked if you choose to add this feature.
Click the link to compare Prepaid Cards
Prepaid cards are a relatively new product in the personal finance marketplace, but are by no means a new concept in our day-to-day lives.
Many of us will have used a prepaid card of some sort during the last 8 years, for example a prepaid gift voucher or a mobile phone top-up card.
A prepaid ‘credit’ card (with ‘credit’ being used very loosely here) looks and works exactly like a standard debit or credit card, except for one crucial difference – there is no account attached to the card so you can only spend money that you have preloaded onto it. The advantage of this is that you can’t go into debt or go overdrawn.
This is really why prepaid cards are not ‘credit cards’; because you don’t get a credit facility and this is the fundamental reason why credit cards are so named.
However, as you will see in our blog later this week ‘The benefits of prepaid cards’, prepaid cards do come with some of the features that make credit cards so attractive.
Today is Balance Transfer Day 2009 and we would like to bring a relevant section of our credit card guide to your attention to help you if you decide to transfer debt from one credit card to another to make the most of a 0% balance transfer offer.
Section 11.3 ‘How to balance transfer to a credit card’ of the compareandsave.com Guide to Credit Cards will talk you through the process of moving debt from one credit card to another card.
However, Brad King, of compareandsave.com says that you should consider your individual needs and circumstances when considering how to handle your credit card debt.
“Choosing a credit card is no longer a case of simply picking a card with the longest 0% offer. Consumers need to consider a range of variables and base their Balance Transfer card choice on their individual situation. By comparing the best deals there are significant savings to be made.
“Depending on an individual’s situation, a 0% deal is not always the best option. We have seen a trend emerging of card issuers adding an administration fees ranging from 1-3%, on 0% offers. This added expense can, depending on the length of time needed to pay off debt, outweigh the money that a 0% card would save.
“Consumers should also be aware that Balance Transfer offers can be withdrawn if their credit limit is exceeded or a payment is missed. And as it can sometimes take longer to pay off debts than first envisaged, before applying, everyone should check what APR rate their card will change to once the 0% offer has expired.”
Click the link to read our tips on ‘How to balance transfer to a credit card’
