Switch Cards to Save Interest

Consumers will spend around £11bn on plastic leading up to Christmas and the New Year, according to the Association for Payment Clearing Services. If you apply for a card charging 0% on balance transfers,by doing this you can switch your debt| by switching your debtto this new card as soon as the festive season is over. It can take two to three weeks for a new credit card to arrive, you then have 60 to 90 days to move over your balance from your old card to the newthe old one.

Virgin Money’s credit card offers you the longest interest-free period on balance transfers of 16 months, but there is a fee of 2.98% of the amount switched over, according to comparison site Moneysupermarket.com. For example someone with an outstanding debt of £1,867 would pay £55.64.  Barclaycard’s OnePulse which has fee of 2.5%, but the interest-free period runs for 14 months. For those who expect to clear you debt even quicker, you could choose Abbey’s Zero card which has no transfer fee and 0% for nine months.

Moneysupermarket.com expert Paul Harrison states that ‘it is a wise decision to be prepared for January by taking out a good credit card deal. ‘But take care not to use it for purchases because your payments will always go on the cheapest debt first. Though some cards with 0pc deals extend them to purchases, this is usually on the basis first few months.’

Should you have more than one credit card,then the most cost effective option to save on interest would be to make use of a debt consolidation loan. By doing this, not only will you make savings on interest, but your monthly repayments may dramatically reduce. Additionally, a cheap loan will give you back control of your finances by rolling everything in to one low monthly repayment. Loans for this purpose can be sourced easily by using a credible loans broker.