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The deal
0% interest on outstanding balances moved over from other credit or store cards.
What do I get?
No interest charges on your existing credit card debts for a possible period of well over 1 year.
The 0% introductory period – so called because you only get it once (just like a joining incentive) will last from 6 months to over a whole year.
How do I use it?
Saving money
If you find yourself with outstanding debts on your plastic now is your chance to clear them up and get your finances back under control.
Use a 0% balance transfer credit card for the sole purpose they were intended for - of course, after bank profiteering – and move all your existing credit or store card balances to a shiny new credit card and enjoy zero interest charges for up to a 1 year (and a bit more – if you pick a good deal).
Just remember your repayments – you want to pay back your debt and become debt free – not splash out even more and find yourself in another sticky situation 12 months down the line.
Making money
Alternatively, you may want to start profiting from 0% deals. You have a good credit rating and no outstanding debts – so why not? Precisely.
'Stoozing' is the new buzzword in screwing the banks at their own game according to Martin "MoneySaving" Lewes, and it's not too late to get in on the game and start pocketing some profit yourself.
To stooze with a 0% balance transfer credit card you can – making sure the card allows it – move your 0% credit to a high interest savings account (via the Egg Money credit card – which you'll need alongside a 0% card), where you leave it for up to 12 months, and then use it repay your 0% balance transfer credit card and keep the money made in interest for yourself.
If you have an offset mortgage – you can move the 0% credit to the savings account linked to your mortgage – you won't make any money, but you'll save interest on your mortgage repayments.
Anything to be aware of?
Watch out for how the credit card issuer will apply payments made to your account. Called the 'allocation of payments' clause – this sneaky t&c can see high interest balances literally trapped behind cheaper – and often larger – balances like 0% balance transfers.
Remember; use the balance transfer deal, but limit transactions such as ATM withdrawals and foreign currency purchase to your debit card. Purchases may also fall into this trap, so play it safe and make new purchases on your debit card too – or a separate credit card.
Balance transfer handling fees have become nigh on impossible to avoid these days – and you’d be hard pushed to ever stumble across a greater than 6-month 0% card without a transfer fee.
These transfer fees are an added expense – and whether you're trying to save money or make money – they need to be factored into the equation.
Obviously, if you're looking to clear up outstanding debts, then you'll easily save way more money than the cost of the transfer fee. However, if you're looking to stooze some profit out of a 0% balance transfer credit card – make sure the transfer fee doesn't swallow too much of it up!
Also, whether you're clearing up your debts or looking to stooze – know when the 0% period is going to end and repay the balance before it does – or, get a second 0% balance transfer credit card ready to shift your balance over to.
Top 0% balance transfer credit cards...
1. Egg credit card
2. Mint credit card
3. Barclaycard Platinum credit card
4. RBS credit card
5. Natwest credit card
Compare 0% balance transfer credit cards
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