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Escape interest by transferring your balance

The Association of Payment Clearing services (APACS) has revealed some interesting statistics as we approach the festive season. APACS has stated that before and during the Christmas period up to £11 billion will be spent on credit cards.

More from Spending Money
20 November 2008

Escape interest by transferring your balance

Escape interest by transferring your balance

If you want to get in on a good 0% deal you’ll need to move pretty sharpish.

This news is good for credit card companies who need to retain customers at a time when a large percentage of the population is debt-conscious, but is it good for you?

Well, if you take advantage of some of the remaining deals, it might be.

Applying for a card which charges 0% on balance transfers could save you considerable pennies. Once Christmas has passed and it’s time to repay the card balance, you’d then have less to pay than if you were also paying interest.

Move quickly

If you want to get in on a good 0% deal however, you’ll need to move pretty sharpish, because financial experts are warning that a lot of these deals are soon to be extinct.

Many price comparison sites have taken the 0% deal advertisements offline and that usually signals the end of the line for a particular type of credit deal.

If you remember the point at which all the 100% mortgages started to fade from view then you’ll be able to imagine the same happening to credit card 0% offers easily.

It’s not too late yet though, so if you want to take advantage now is the time. It also takes a few weeks to get a new card if you’re a successful applicant, so if you want a card in time for Christmas, apply soon.

0% offers

There’s a card on the market which will give you up to 16 months of interest free credit, The Virgin Money card, though there is a transfer fee of 2.98%.

Choosing this card could take you to beyond next Christmas without a single interest payment. Equally, Barclaycard’s OnePulse has an interest free period which is longer than a whole year at 14 months and that card charges just 2.5% on balance transfers.

Abbey's similar credit card offering could also be a good choice with 0% interest for 9 months and no transfer fee. The Abbey Zero card is ideal for people who plan on paying off their balance over the interest free term but could also appeal to those who want some light relief from heavy repayments for a longer period.

Expert opinion

Experts are saying that it’s a good idea to apply for a credit card in 2008 as next year, should you need a card, you may be even less likely to get one.

Currently, almost half of all credit card applications are turned down but in 2009 that figure could rise and there will almost certainly be fewer good deals around.

It’s also a good idea not to use new credit cards with the 0% balance for purchases because that’s not what they’re intended for.

Rather, spend on a current card you own in 2008 and clear your balance on a new 0% interest card in 2009 to truly benefit.

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Best Buy Credit Cards

Credit Cards Balance Transfers Purchases APR Representative (Variable)
Tesco ClubCard Purchases Credit Card Logo Tesco Bank Logo Tesco ClubCard Purchases Credit Card Apply
9 months
2.9% fee
18 months
Representative Example: The annual purchase rate is 16.9% p.a (variable) so if you spend £1200 your representative apr will be 16.9% p.a (variable)
Barclaycard Platinum With BT (27 Mths) Logo Barclaycard Logo Barclaycard Platinum With BT (27 Mths) Apply
28 months
3.5% fee
6 months
Representative Example: The annual purchase rate is 18.9% p.a (variable) so if you spend £1200 your representative apr will be 18.9% p.a (variable)
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