If you owe money on credit cards, there’s no excuse for paying any interest at all if you can avoid it – and many people can. If you’re paying 29.9% interest on a store card or even 15% interest on a credit card, providing you have a good credit rating, you should switch to a 0% balance transfer credit card deal immediately.
Credit card users could save on average around £360 a year, and repay their debt much faster, by switching their current card balance to a card offering introductory interest free rates. 0% credit cards charge no interest on balance transfers for an introductory period of between 6 and 12 months, giving you the opportunity to pay off your debt faster.
However, this process isn’t as easy as it once was. Many cards now have balance transfer fees – usually a charge of around 2% of the amount transferred, although there are still some cards which don’t charge.
When the 0% introductory period comes to an end, you could switch any outstanding debt to another interest-free card.
If you’re not keen on chasing 0% offers on a regular basis, a card that charges a low interest rate for the life of the balance would be more suitable.
Some card companies also offer interest free rates for making new purchases. By taking out a 0% credit card for new purchases, you can effectively give yourself an interest-free loan for the length of the introductory period. But make sure it’s all paid off by the time your 0% period expires, or you’ll negate your savings with huge interest costs.