0 interest credit cards

You can save lots of money on purchases and transfers by switching to 0 interest credit cards. With families struggling with higher costs being able stretch the budget further by using a credit card can help lift the financial burden. But before you go ahead and apply for that new interest free card you need to fully understand the terms otherwise you may find yourself faced with unexpected charges.

There are certain circumstances you need to be aware of that will help you avoid those interest charges you thought you were avoiding. If you take a card with 12 months zero interest and use it to make purchases and you have transferred the balance from your old credit card you could end up paying.

0 interest credit cards but beware transfer interest

As you pay off your credit card the money will first go towards paying for any transfer, this will continue until the transfer has been cleared. Any payments you make on the card after that will go towards paying for any new purchases. If after the 12 months you still have debt on your card you will be charged interest on it even though it may be something you purchased months ago.

To avoid the credit card interest trap you should only get a credit card and use it for one thing, either new purchases or to hold and pay off any balance transfer. So if you have an existing card where you are paying interest on amounts you have yet to pay off then get a card that offers zero percent interest on the life of the balance transfer.

After you get this card do not use it for purchases, just use it to pay off your balance transfer. This will mean you will not accrue any more interest charges so your debt will remain at the same level until you eventually pay it off.

For new purchases get another 0 interest credit card that offers a long interest free period. Use this card only for new purchases and do not transfer any balance from your old card. This means that you get to purchase new items on the new card without incurring any interest. Again make sure that you pay the balance off before the interest free period ends if the terms of the card state you will be charged interest on any existing purchases left on the credit card with 0 interest at that time.