0 credit card rate by bestman


									January 8th 2007

   Brits repay less than ¼ of transferred credit
      card debt during 0% interest periods
 - M&S Money urges borrowers to look beyond short-term interest free deals
   unless they are confident of repaying their debt during the initial period -

       Over half (51%) of credit card holders have now transferred a balance,
       with an average of £2,763 being transferred
       However, £2,084 or 75% of the debt is still owed on a card at the end of
       any introductory interest free period
       Only one in three (36%) borrowers making use of balance transfer deals
       manage to repay their debt during low interest periods.
       Men are worse at repaying debt - on average only clearing 17.5% of
       their original transferred balances during the initial period
       Two-thirds (64%) of cardholders with outstanding balances revert to
       their card’s standard interest rate and never transfer that debt again.

Latest research by Marks & Spencer Money shows that the majority of Britain’s credit
card borrowers have taken to the practice of moving debts from one card to another
– known as ‘transferring a balance’ – with over half (51%) of cardholders having
switched a balance to a card with a cheaper rate at least once.

Although this good financial management deserves praise, the research suggests
borrowers are viewing interest free introductory periods as a delaying tactic rather
than an opportunity to clear debt more quickly. Only one in three (36%) borrowers
who transfer a balance clear their debts by the time their new credit card reverts to
its standard rate, typically between 16 and 19% APR.

Unsurprisingly, it tends to be borrowers with smaller debts who clear them within
introductory periods. So even though a third of borrowers manage to repay their
debts, less than a quarter of actual transferred balances are repaid during
introductory periods. This is likely to be due to borrowers with larger balances not
being able to make the necessary repayments to clear their debt.
The amount repaid also differs between men and women. Men tend to make larger
balance transfers and are worse at repaying them, on average men will only repay
£17.50 of every £100 they transfer during their introductory period. This leaves them
with over 80% of their debt reverting to a higher standard interest rate.

Table1: Balances transferred and repaid during low interest introductory periods:
                Av. Amount of debt Av.    Amount             repaid % repaid during
                transferred        during   low             interest low interest period
   Adults              £2,763               £679                            24.5%
    Men                £3,152                      £551                     17.5%
  Women                £2,405                      £664                     27.7%

Eddie Nott, deputy chief executive of Marks & Spencer Money commented,
”Britain’s borrowers have caught the balance transfer bug, however the majority are
not making the most of their low interest deals and clearing their debt. We urge
borrowers to opt for lifetime balance transfer offers unless they are confident they
will repay their borrowings while it’s cheaper to do so.”

A concern for borrowers who still owe money on their card at the end of their
introductory period is that almost two out of three (64%) of them never ‘transfer’ the
debt again and continue borrowing at their card’s higher standard interest rate.

A simple alternative for borrowers in this situation is to opt for a credit card such as
the &MORE Credit Card from M&S Money. It is one of the few cards not to charge a
BT fee and it offers rates of 3.9% on balance transfers for the lifetime of the balance
and 0% for 12 months on all purchases*.

For more information customers can call 0856 900 0900 or go online at

                                        - Ends -

For further information please call the Marks & Spencer Money press office:

James Thorpe on 020 7992 1433                Rob Skinner on 020 7992 1571
jamesthorpe@hsbc.com                      robskinner@hsbc.com

Liz Neild on 01244 686 068

Notes to Editors:

•   Research compiled by YouGov with 2278 UK adults during the 20th – 23rd October

* Offer launched 5th September 2006:
   - 0% on all purchases fixed for 12 months from the date of the account opening
   - 3.9% pa fixed for the life of balances transferred within 6 months of account
   - 0% fixed for 2 years from the date of purchase of M&S furniture in-store over
        £1,000 (maximum purchase £3,000 for new card applicants)

•   Typical 16.9% APR variable
•   No fees for balance transfers
•   &MORE reward points on every purchase - 1 point per £1 for purchases made
    within Marks & Spencer stores, 1 point per £2 for purchases made elsewhere
•   Additional &MORE bonus points on offers in Marks & Spencer stores and online
•   Up to 10% off millions of holidays with the &MORE Travel Club
•   Card issued by Marks and Spencer Financial Services plc
•   Credit subject to status to UK residents aged 18 or over

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