Want to cut yearly train fares? Join the CommuterClub, which offers savings of up to £747
- CommuterClub enables travellers to take a loan to cover bills up front
- Borrowers pay annual interest of 11.6 per cent
- CommuterClub says works out cheaper than paying fares weekly or monthly
Rail fares are one of the biggest annual costs for working families – and also one of the toughest to trim.
Buying an annual season ticket is by far the cheapest method – and helps beat the full pain of the yearly price rise imposed on hard-pressed commuters. From January, fares will rise by an average of 3.2 per cent in line with inflation.
For someone commuting from Birmingham New Street to London this means an annual ticket bill increasing by £184 from £5,760 to £5,944. Finding such a big upfront sum is a struggle for many.
Specialist financial services company CommuterClub aims to give a helping hand by enabling travellers to take a loan to cover the bill up front
Specialist financial services company CommuterClub aims to give a helping hand by enabling travellers to take a loan to cover the bill up front.
Borrowers pay annual interest of 11.6 per cent which CommuterClub says works out cheaper than paying fares weekly or monthly.
Using the Birmingham example, a customer whose annual ticket starts next month would pay a total of £6,083 with CommuterClub, including interest.
This is a saving of £747 over the year for someone paying monthly or £1,626 buying weekly.
If commuters default on the loan, any remaining value on the ticket is reclaimed by CommuterClub. A similar loan arrangement is available for those commuting within London by MyCommute4Less via company Premium Credit.
VERDICT: The CommuterClub loan offers a convenient way to spread the cost of train fares. But there are alternatives that can work out cheaper.
Many employers offer free or low interest annual season ticket loans as a job perk – so ask. Alternatively, consider a zero per cent credit card.
There are several that offer interest-free credit for up to 28 months, including Post Office, Virgin Money, Tesco Bank and Barclaycard.
You will need a squeaky clean credit record to be eligible for the longest zero per cent periods. You must also ensure the balance is paid off before the zero period expires to avoid the go-to rates – 18.9 per cent for Post Office and 19.9 per cent for the others.