The latest credit card market analysis from uSwitch.com has revealed that almost 2 million consumers have been rejected for balance transfer deals in the last year.

More and more people are trying to manage their credit card debt the easy way by moving it to another credit card, using the 0% interest until the next card comes along. But the credit merry-go-round is coming to a halt and more people than ever are finding that they are saddled with their debts. For many people, the 0% party really is over as they have reached a dead end.

As a result of lenders saying no, these consumers will have to fork out £535m in interest payments in the next 12 months as they are unable to switch to a new provider. In total, £3.5bn of credit card debt is now stuck on interest bearing credit cards as consumers cannot switch to their next 0% deal.

Across all types of credit card, more than one in ten consumers, totalling 3.32 million, has had an application declined in the past twelve months. This is a clear sign that providers are still acting on the air of caution and only lending to those with a squeaky clean credit record.

Louise Bond, personal finance expert at uSwitch.com comments: "We can't ignore the fact that the country is in economic turmoil – a situation which has been catalysed by bad consumer credit. The knock on effect for credit card customers is that those with a less than perfect credit history could find themselves being turned down for the next best 0% deal, forcing them to pay interest. This is a huge problem for switchers as these people have accumulated debt based on the fact they do not have to pay interest on it."

Remember – the knock on effect of rejected credit applications is that it will appear on your credit report and, in the long term, have a negative impact on your score. With this in mind, it's important to check your report before applying for products to make sure you stand a good chance of being accepted – constantly reapplying to different suppliers will make the situation worse.

If you can't get another credit card because your debts are too high or your credit score is simply not good enough, seek out some professional financial advice.

SOURCE: uSwitch.com, 24/06/09

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