Are UK consumers benefiting from 0% balance transfer credit cards?

Many consumers in the UK have been turning to 0% balance transfer credit cards in recent years, the idea being that they can transfer the balance from a high interest credit card onto a credit card that offers 0% interest for a specified period. This givens the consumer time to clear the balance that has been transferred without being charged any interest, and in some cases consumers can save a fortune in interest simply by clearing their transferred balance within the interest free time period.

However, according to recent figures most people in the UK that do take advantage of interest free balance transfer credit cards are not actually gaining from the deal, as according to data only a around a third of those that transfer their balances to an interest free card actually repay the balance in full within the interest free period. The remainder of us seem to be paying the required fee to transfer the balance to an interest free card, paying off a portion of what we owe, and then repaying the rest after the interest free period has expired, at which point many 0% balance transfer cards switch to an above average rate of interest.

According to some industry professionals those of us that are not sure that we will be able to clear the transferred balance within the interest free period on a balance transfer credit card could fare better by seeking out a credit card that offers a low interest rate for the life of the balance rather than a short interest free period and then extortionate interest rates on the remainder of the balance. By doing this you can save yourself the administrative fee that many balance transfer card issuers charge for transferring a balance, and you can repay your balance over a longer period without being hit by sky high interest charges.