One quick move to ‘slash credit card debt interest by £700’ | Personal Finance | Finance

Borrowers can save hundreds of pounds in interest charges and be free of debt faster by making one quick move, a report has found. Moneyfactsgroup.co.uk has shared its latest UK Unsecured Lending Trends Treasury Report, which provides a number of insights into the state of the personal finance market, and opportunities to save money.

It included advice around saving nearly £700 in interest by being on an interest-free 0% credit card offer. The report found the cost to borrow on credit cards at the highest level in two decades, with the average purchase APR (which includes card fees) now at a new record high of 36.0% APR (electronic records began two decades ago, in June 2006). Meanwhile, the average purchase PA (per annum) rate rose to a record high of 26.878%, as did the average cash PA rate (also known as cash advance) to 30.544%.

Rachel Springall, finance expert at Moneyfacts, says failing to take advantage of 0% offers and simply paying the minimum default amount could see you hit with unnecessary huge costs.

“Credit card holders who do not have a 0% offer and only pay the bare minimum back each month will have the debt sitting overhead for much longer than they might realise,” she explained.

“A £2,000 debt would take two years to pay off if someone repaid a fixed £115 every month if being charged 36.0% APR, costing almost £700 in interest.

“However, those who move this to a 0% balance transfer card can clear it in just over 12 months by making £150 monthly payments.”

You may not have to pay costs like a transfer fee or card administration fee at all, “as right now there is a fee-free 13-month 0% balance transfer deal available from Barclaycard, a 12-month offer from Virgin Money and Santander, as well as 11 months with NatWest and RBS”, Ms Springall added.

“This is made more strikingly significant with recent data from UK Finance revealing that 48% of credit card debt incurred interest in March 2026, so whether big or small, it’s wise to prioritise paying off debts quickly,” the finance expert said.

However, it’s important to keep track of how long the 0% rate lasts for to avoid suddenly being hit with much higher rates when it ends.

In a reflection on the report’s overall findings, Ms Springall said: “Competition has ignited on introductory interest-free card offers which could help defuse the glaring debt time bomb facing households.

“This is great news at a time when the average interest rate charged on credit cards is at a 20-year high. The average length of a 0% balance transfer deal, of 605 days, is at a four-year high and the upfront cost to move debts to a balance transfer deal has dropped to 2.48%, its lowest cost in over a year.

“Those making large purchases and wanting a bit of breathing space may be delighted to see the average length on 0% purchase terms, now 303 days, is at its highest point in four years.

“Credit cards are a great option for borrowers for everyday purchases or more, as any goods or services not received which are valued over £100 up to £30,000 are covered under section 75 of the Consumer Credit Act.”

You can find the full report here.