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Credit cards can prove really invaluable to consumers in the UK, offering the convenience of not having to carry cash around, making it easier to spread repayments on purchases, and enabling consumers to enjoy the peace of mind that they have cash to fall back on in the event of an emergency.
However, on the downside, the interest rates charged on many credit cards can be very high, and unless you are able to repay the balance on your card at the end of each month you could end up making crippling repayments on your credit card balance.
One solution that has helped many people to make big savings on their credit card spending is the availability of 0% balance transfers.
These credit cards allow consumers to transfer outstanding balances from high interest credit cards to a new, 0% interest credit card, thus saving a fortune on interest.
However, there are some things to look out for with these 0% balance transfer credit cards to ensure that you are actually getting the best deal.
For instance, some 0% balance transfer credit cards only offer 0% for a short period whereas others offer this interest rate for a longer term, as long as twelve months.
And while most 0% balance transfer credit cards charge a handling fee for transferring your balance, there are some cards to be found that offer a capped maximum fee - which can save you money when transferring balances in excess of £2,500.
How transferring your credit card balance can save you a small fortune
With the high interest rates that many credit cards charge, you could find that the vast majority of the monthly repayment that you make on your credit card balance is being swallowed up in interest rather than going towards clearing your principal balance.
By transferring the balances on all of your high interest credit cards to a 0% balance transfer credit card you can eliminate this problem, enjoying the peace of mind that every penny you pay towards your credit card balance over the introductory period is going towards clearing what you owe rather than lining the pockets of the lender.
Transferring all of your high interest balances to one 0% balance transfer credit card will also make managing your credit card debts easier, as you will only have one repayment to deal with.
In order to transfer your balances, you will need to obtain a 0% balance transfer credit card that provides you with an adequate credit limit, and this will be based on your financial status and credit rating.
The majority of 0% balance transfer offers, especially the longer ones, now charge a handling fee for transferring your balance. It's an added expense that should be taken into consideration, but can be hard to avoid.
Balance transfer handling fees are usually around 2% of the balance you are transferring, there are some 0% cards that cap this fee at a maximum cost of around £50 - which can save you money if you are transferring an amount in excess of £2,500.
There are also a few balance transfer credit cards left on the market that do not charge a handling fee at all. However, these cards tend to offer low rate balance transfers until repaid in full - a good deal if you do not want the worry of ending promotional periods, you will be charged interest on the balance, but it will be at a very low rate.
Find the right 0% balance transfer credit card for you
Although many '0% balance transfer credit cards' do harbour hidden costs, such as handling fees, there are still some deals out there with card issuers that can offer completely free balance transfers.
It is advisable to compare the different cards available that offer 0% interest rates on balance transfers and that enable you to transfer your balance without charging you any fees.
The power of the Internet will enable you to do this with ease, so you can compare the benefits and terms in order to make a more informed decision.
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