Anyone that has been in debt can appreciate the difficulty of getting out of debt, especially when they are continuously fighting a losing battle against interest charges.
However, there are more efficient techniques that can be used to reduce credit card debts more affordably, using methods that at first may not seem like the obvious choice – another credit card.Nowadays, every credit card serves a purpose, each offering features that are designed to help different consumer types, so whether you make use of interest free cards to manage your spending/debt, or would prefer to earn rewards for your spending, there’s a credit card to match.
Balance transfer credit cards effective allow consumers to freeze the interest they would normally pay on their debts, while giving them an introductory 0% interest period to pay off the balance. While these cards do come with a small transfer fee (usually around 3% of the balance), most will find the fee is significantly lower than they would pay in charges over the life of the card.
For example, say you owed £3,000 on a credit card with a typical APR of 16.9%. Over the course of 12 months you would pay £507 in interest charges alone. Now consider the longest 0% balance transfer period on the market – the Barclaycard Platinum credit card offering 0% for 17 months with a 2.9% transfer fee. As long as you clear your debt within the 0% period, you will pay just £87 – rather than £718.25 for the same period with the standard card.
Barclaycard are also offering £20 off the transfer fee if you apply by 31 January, bringing your charges down to just £67.
The golden rule with this card is to always pay at least the minimum monthly payment to avoid charges.