If you’re looking for credit card deals and want to avoid paying more than you must, it’s essential that you take a little time to do the job properly, and ensure you know what you’re doing.
People use credit cards primarily because of the ease they offer the shopper, but with the advent of interest free credit card deals a few years ago, they’ve also become an extremely efficient way of managing debt. Interest free credit card deals are primarily an incentive from the card provider to entice new customers in- they offer zero interest credit on purchases and balance transfers for a limited period. By constantly moving from one interest free credit card deal to another, some people can continually transfer their balance and so avoid paying any interest at all. Given enough discipline, enough credit cards and enough organisation, you can even put your entire mortgage onto interest free credit card deals and avoid paying interest on your home.
If these sorts of interest free credit card deals sound like the sort of thing you’re interested in, you should shop around and look at the various credit card deals available. Price comparison websites can be extremely helpful here. Obviously, some interest free credit card deals are better than others, with the offered interest-free periods varying greatly. Some credit card deals charge a one-off fixed management charge when transferring balances, which should always be factored into your calculations. Others will have different interest free periods for purchases and for transfers, so you would be very well advised always to ensure that you know exactly what the terms are when you’re signing up for credit card deals.
Some interest free credit card deals have been accused in the past of misleading the customer- with regards the order in which different facets of the credit card debt is repaid. When looking for interest free credit card deals, be sure you are fully aware of which order your debts will be paid off: for example if you transfer £2,000 at 0% but have a 6% charge on new purchases, and then you go shopping and spend £500, some cards will not put your monthly repayments towards this £500 until the £2,000 is repaid. This means that although you have an interest free credit card deal so far as the transferred balance is concerned, you’re actually going to be paying 6% on that £500 for months, until the balance-transferred £2,000 is repaid in full.
But that shouldn’t put you off what is essentially a terrific form of flexible lending. But as with all forms of credit, you should enter into this with your eyes open and only look at interest free credit card deals that suit your situation. And once you’ve found the right credit card deals for you, be sure you’re fully aware of the terms of the credit and follow them to the letter.