Credit cards Updated:
The football transfer window may slam shut in just a few days time, but there is still ample time to pull of the deal of the summer – a 0% balance transfer.
It is a scenario that chimes with many: making just the minimum repayment on our credit cards and ignoring the fact that the main balance has barely moved in months or even years.
Even small balances can take years and years to clear by making only minimum repayments.
With the amount eventually paid back swelled by interest repayments, it is often the case that substantially more is spent paying back credit card debt than was originally spent on the plastic.
Credit card repayments made by consumers that could have switched to a 0% balance transfer card, but didn't, totalled some £9 billion last year – a staggering amount by anybody's standards.
So, as another unpredictable British summer draws to a close, now is as good a time as any to get your credit card or credit cards in order.
A stand out choice if you're looking to shift your debt onto a 0% balance transfer card is the Barclaycard Platinum Balance Transfer Visa, which has just benefitted from the interest free period rising from 15 months to 16 months!
A 16 month period in which you won't be charged interest on your transferred balance means you'll have plenty of time to really eat into your debt.
For instance, if you have a balance of £2,000 to pay off, a payment of £125 a month for the term of the card will clear it completely.
It is certainly worth setting up a direct debit for such an amount at a date when you know you will have sufficient funds to make a payment i.e. when you've been paid.
If you're serious about clearing your balance, make sure you do not spend on the card, as interest will be accrued on new balances. Instead, if you cannot face the thought of giving up credit card spending, look for one that offers 0% interest on purchases.
A balance transfer will entail a charge for switching, typically around 3% of the balance, while the interest rate after the 0% period can be quite hefty, so make sure you regularly review your situation.
However, as a method of paying down credit card debts without incurring interest, 0% balance transfer cards are hard to beat.
Check the Moneyfacts Best Buy tables for a range of 0% balance transfer cards, which include long balance transfer offerings from NatWest and Nationwide.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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