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How credit cards can ease the financial pain

written by Alex
30.11.09 Posted in Finance 0 0

Feel like your finances are beating you up? Join the club - it's one with an increasing membership. With Christmas just around the corner, now is the time take control over your spending. Christmas has many traditions - plus the traditions we invented during the boom years - splashing the cash and maxing out our credit cards. While overindulging generally meant a lean January...

Stretch your credit limit with a flexible friendStretch your credit limit with a flexible friend

... with reheated pudding and the last of the stale Afternoon Tea biscuits, this turned into a lean February, March, April and even May if we went too far overboard.

For those of us with a load of debt on our credit cards and paying way too much in interest, now is a good time to check out a 0% balance transfer credit card.

This card can become your best friend - it has a 0% interest payment period which varies depending upon the issuer and is perfect for getting your finances under better control at an expensive time of year (or at least preventing them from spiralling totally out of control).

Here at uchoose.ie, we like Bank Of Ireland's 2 in 1 credit card which provides an interest-free period on both purchases and balance transfers for six months as a new customer. It will be a massive help over the Christmas period and allows you until June to seriously reduce your debt.
The Bank Of Ireland Clear card is another winner, although only offering an interest-free period on balance transfers. Maybe one to sign up too in the new year once all the spending is out of the way?
If you're looking for a longer balance transfer period, then Bank Of Ireland's Platinum Advantage card is perfect. It offers a full one year balance transfer period, although there's a 2.9% balance transfer fee when coming from a competitor, which for the longer time periods is sadly unavoidable.

Get the balance right

It's important not to use your balance transfer credit card for spending as it totally defeats the purpose of what you're trying to achieve. The best trick, and granted, it may seem an odd one, is to cut up your new balance transfer card before you can spend on it.

That way, issuers cannot penalise you further by allocating any payments you make to your cheapest debts first (ie promotional balance transfers), leaving the most expensive debts until last.

When used right, these cards can make a massive difference to your debt repayments and cash flow.

When applying for a balance transfer credit card, clearly remember, note, memorise (whatever you need to do) the day the 0% period finishes and the APR jumps up. You'll need to pay off the balance before this date or else, a hefty interest rate is coming your way.

If you know you won't be able to pay off your balance within that period, you'll need to transfer it over to another 0% balance transfer credit card and that could mean paying yet another transfer fee.

Plus you need to make sure you don't get caught for stamp duty on credit cards which is applied every April 1 (yes we know that's April Fools Day). If you are switching credit card, make sure you close your old credit card account. Remember that you have to pay stamp duty before you close your old credit card account. Ask your old credit card issuer for a letter of closure, which proves you paid the stamp duty for that year. Give this letter to your new credit cardissuer as soon as possible so they do not charge you stamp duty again. Remember, if you don't close you old credit card account, then you will charged €30 stamp duty twice.

So if you're looking for a brand new balance transfer deal, hopefully one of the above options will suit your requirements. If not, then our credit card search can help get you the the best options currently in the market.

 

 

Alex

Click here to view a bio plus other posts.

Alex
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