Choose a 0% Balance Transfer Credit Card

Look For Savings on The Credit Card Bill With Pre-Christmas Makeover

Oct 25, 2009

With the summer holiday season only just past and the festive season around the corner, credit card spending will continue to grow in some households.

Sadly for a number of people, Christmas spending will be “The straw that broke the camel’s back,” credit card limits will be reached and in many cases breached. However a pre-festive financial makeover to reduce costs, may make all the difference.

Credit Reports

Before looking at possible savings on credit card interest payments the first step should be for borrowers to check the accuracy of their credit report.

Credit Score

In the UK, a personal credit report can be inexpensively obtained from one of the major credit reference agencies listed below. A credit score is calculated from the information on the report and determines what rate of interest a lender will offer. The better the credit score, the better the rate of interest offered.

So it’s definitely in a person’s interest to check the accuracy of entries in their report. If there are inaccuracies or out of date information contact the credit reference company to have it removed.

0% Balance Transfer Credit Cards

Next, look at the rate of interest (APR) the credit card company is charging, many are around the 16% mark. If this is the case look for the best 0% balance transfer credit card on the market. Virgin is currently offering 0% interest for 16 months with a fee of 2.98% calculated on the balance transferred.

There are other 0% balance transfer credit cards on the market, so it’s worth spending some time researching the best credit card deals available. Remember if rejected by one company it does not mean that people cannot apply for a different one. However too many applications will have a detrimental effect on a credit score.

The cardinal rule for 0% balance transfer credit cards is not to spend on them. They should only be used as a tool to pay off an outstanding balance without interest charges being incurred. Any new spending on the card will generate interest charges.

0% on Purchases Credit Card

For credit card spending over Christmas, apply for a 0% on purchases credit card. It works in the same way as the balance transfer card, no interest charges until the 0% offer period ends. Don’t be tempted to withdraw cash with the card, this will attract a high rate of interest and try to pay more than the minimum payment each month.

For those that don't want to change their credit card but want to take advantage of of cheaper interest rates financial journalist Martin Lewis offers some advice. Phone the credit card company and say, "I need cheaper debt but I would prefer not to leave you." In his experience many company customer service people have substantial authority to offer deals.

Credit Reference Agencies:

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The copyright of the article Choose a 0% Balance Transfer Credit Card in Personal Budgeting/Finance is owned by Neil Gunn. Permission to republish Choose a 0% Balance Transfer Credit Card in print or online must be granted by the author in writing.