How to use balance transfer cards to amamnge your finances

We’ve all been there, coerced into owning a store card or expensive credit card by some silver-tongued salesman. Forty per cent off here, exclusive deals there; it’s all great until that first month’s bill comes in and you realise they are charging you up to 30 per cent interest on your purchases.

But there is another way. You signed on the dotted line but you have got an alternative, and that alternative comes in the form of a balance transfer credit card.

Say you have a £3,000 debt on your credit card and you are paying a typical APR of 18 per cent. Now if you are struggling to handle this debt, a great way of easing your financial woes is to transfer that money onto a balance transfer card with a much lower interest rate. Some balance transfer cards even give you 0 per cent interest for the first 12 months you use it, which is a great way to pay off your debt or give yourself a little breathing space.

If you need to continue spending, then transferring is a good idea too as everything you spend after making the switch will be on a much lower interest rate, saving you money and helping you to avoid more debt.

For those of you that pay off your credit card regularly every month, this type of balance transfer card is probably not for you. However, if you have accrued numerous debts across a number of cards, then managing it interest free, in one lump sum, can be the ideal solution.

The best way of making sure you get the most out of your new balance transfer card is to set up a direct debit so you are constantly paying off your debt. Time it so you will pay it off before the zero per cent interest deal runs out and you are really making a saving.

Most of the high street banks offer balance transfer credit cards so it shouldn’t be hard to find one to suit you. Shop around before you decide as there are some great deals out there and different cards suit different people; some even have added perks like travel insurance or air miles. Use a price comparison website to easily find the best deal for you from the comfort of your own home.

The majority of the time you will have to pay a fee to transfer your debts, but it is often only two to three per cent of the amount you owe. For example, if you owe £1,000 you’ll only have to pay £30 to transfer your debt, which, with zero per cent APR for a year and your debts rolled into one sum is well worth it.

Balance transfer credit cards aren’t for everyone, but if you struggle to juggle your debts and own cards with extortionate interest rates, then they could be the answer to your money troubles.

http://www.creditcards.co.uk/compare-cards/0-balance-transfer-cards/

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