Credit cards have quickly become a necessary accessory and only when the problems of accumulating debt, does it become apparent the financial problems that you are having in clearing off the debt. What is important to realise is you are not alone, there are many people in the same situation as you around the world. What is also important to note, is the fact you are looking at ways in which you can reduce this burden.
Switching credit card deals
If you are considering switching to a new deal then it is vital that you are not only making the right choice in deals, but you are saving money. The best way to check this is to use one of the on-line calculators that are available to check the deal; these are a great tool because often it is difficult to see first-hand how much the deal is going to cost you, sometimes they can sound great but in fact, they are more expensive.
It is important to watch out for the transfer fee. This fee is part of the 0% deals, the credit card company is looking to make some money from the transactions and this is where they are able to make money on your debt. Often the longer the deal the more expensive the transfer fee, this is important to factor into your equations when you are working out if the deal is right for you.
To work out the length of time that you need a 0% deal, is to take into account the amount of money that you can afford to pay off your credit card each month, add the amount owed to the transfer fee, divide this by the amount you can afford to pay. The figure is the amount of months you will need to pay off your credit card. This is as long as you are not adding to this bill each month.
It is important you are aware of the companies which you are unable to do balance transfers with, even if you are with one company. A balance transfer between companies is impossible if they in the same group. For example MBNA are associates with a lot of other companies like Virgin Money, The National Trust and the list goes on, if you have a credit card with one of these companies and you want to transfer to another company, they can’t be part of the same group.
It is possible to check if you are eligible for deals without putting in an application, which will have a negative impact on your credit score, which is not what you want if you are looking for a new deal.
Protecting your credit card deal
It is important that you protect the deal once you have secured it by ensuring you make your payments on time and you don’t exceed your credit limit. This can void the agreement which you have signed and it can mean the credit card company can terminate the 0% deal you previously negotiated.
Note down the expiry date of your current deal; give yourself a couple of months to sort out a new deal, if you have failed to pay off the debt. This will ensure you have enough time to apply for a transfer avoiding any interest payments.