Every one knows that borrowing on credit cards and running up a large debt on your credit card can be a very expensive business. But, there are ways to reduce the costs with some careful planning and a balance transfer.
Many cards are offering 0% interest deals for a limited period of time. The length of time will vary from card to card as will other terms and conditions, but depending on the size of your balance, you have the potential to save hundreds of pounds in interest fees.
As a starting point, you will need a good credit rating to be successful in a credit card application. You are not guaranteed to be granted the card you have applied for, so read the small print carefully.
Investigate the various offers available to you, such as the length of time the 0% offer runs for. When you have been given your credit card, put the offer end date on the calendar and make sure you take action before the interest rate jumps to a high level.
So, you have your new card and you have completed the balance transfer, but there is no time to rest on your laurels.
0% deals are usually for a couple of months and offers lasting more than a year are more unusual. It would be wise to keep up to date on the ever changing world of credit cards and the latest offers.
As your current deal is coming to an end, review more deals and if possible apply for a 0% card and once again carry out a balance transfer.
Whilst this sounds simple, this way of handling your finances will require some organisation, disciple and careful management, as well as a good credit scoring.
In short, it is vital that you adhere to the following:
- Make regular monthly payments off the card during the 0% time frame
- Whenever possible pay more than the minimum payment to have the greatest impact on your debt
- Switch your deal BEFORE the 0% ends, once interest is added you can very quickly undo all the good you have done.
If you do not think that you can pay off the balance within the 0% deal, or perhaps you do not think that you have the discipline to keep switching and changing your credit card company, then don’t think all is lost for you!
Look at the interest rates on cards and choose the lowest interest rates for a long term option. This way, whilst you will be incurring interest charges, they are still the less expensive option for your circumstances.
Once again, don’t sit back and ignore what is going on in the world of credit cards. If your credit card company increase the interest rate, shop around and see if there is a better deal.
Even if your interest rate hasn’t changed, has one of the other companies brought out a deal that is better than your current one? An occasional review of what is available and over time your personal circumstances will also have changed, could see you finding an offer that could save you money.