The average British consumer remains loyal to one credit card for around six years, which could cost them up to £420 ($675 USD) more in interest than those who switch cards, according to a recent survey from financial comparison site Money Supermarket. The survey found only 9 percent of consumers intend on changing cards in the next six months versus 66 percent who said they would likely remain with the same credit card.
The high cost of remaining loyal to one card is due to the rising interest rates associated with the cards, which the Bank of England has estimated has risen 1.62 percent since 2006. For example, a customer who has a £2,000 balance on their credit card paying the average rate of 17.32 percent versus taking advantage of leading offers like a 0 percent balance transfer card for 24 months is losing out to the tune of just over £420.
From The Telegraph:
“Apathy certainly reigns with many credit card holders who are happy to languish on high interest rates with their existing provider”, says Kevin Mountford, of MoneySupermarket.com. “Although consumers may not wish to switch credit cards on a regular basis, they should review their card from time to time to assess whether it still suits their needs and financial situation; otherwise they will fail to get the best value.”
With the Christmas shopping season underway, now is the prime opportunity for consumers to switch cards and take advantage of new offers. Overcoming the loyalty barrier, however, will not be easy despite only 26 percent of respondents attributing their loyalty to good customer service. In fact, the loyalty of British consumers might be the result of poor financial education with 22 percent of survey respondents stating that they have never considered changing and another 16 percent are too lazy to change cards. Providing clear information about the benefits of changing cards may be the only way to get consumers to switch cards, and with poor economic prospects across for the United Kingdom and Europe, consumers may finally start listening.
Click here to read more from The Telegraph.