Credit Transfer Tuesday: Today could be a key day to get your finances back on track

`Credit Transfer Tuesday’ may not have quite the appeal as Shrove Tuesday, but for those looking to get their finances back on track, it may be a key day in the year.

Comparison site confused.com reports that credit card transfer applications are expected to spike between 20.00 and 21.00 on January 12th.

Meanwhile research from Sainsbury’s Bank Credit Cards reveals that around seven million UK adults are considering transferring a credit card balance in 2016. The bank’s research shows an average outstanding credit card balance of £2,347. Sainsbury’s Bank’s data shows that January is the busiest month for balance transfer applications, followed by February and March.

There are many credit cards offering interest-free periods of 12 months, with some doing so for as long as 37 months. However, those with the longest interest-free periods also have the highest transfer fee. Typically, this is around 2.7% of the balance being transferred. According to Moneyfacts.co.uk, the longest interest-free transfer period currently available is 39 months from MBNA, with a fee of 2.98%. Tesco, Halifax and Virgin all offer 38 months, with slightly lower fees. Sainsbury’s is among those offering 37 months, with a 2.89% fee.

Simon Ranson, Head of Banking at Sainsbury’s Bank said: “Transferring a credit card balance can be an excellent way of paying down debt and organising finances if managed properly, and January, just after the Christmas period is a popular time to do this. “We’d urge people who have set up a balance transfer card to move their balances quickly to save paying unnecessary interest. By not transferring their balances straight away, card holders could potentially still be incurring interest with their old credit card provider.”

Of those card holders transferring a balance, Sainsbury’s Bank data shows 15% do a second balance transfer within the first 10 months, the majority of which occur in months two, three and four from account opening.

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