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All credit cards require you to pay at least the minimum payment amount each month when you have a balance outstanding on the card.
0% balance transfer credit cards are no different, and even though you may be receiving no interest charges, this doesn't mean no payments!
- You must pay at least the minimum payment amount required - usually 2% to 3% of your outstanding balance each month.
- You should pay as much as you comfortably afford to - you'll clear your card debt quicker and reduce the need to transfer your balance again when the 0% period ends.
How 0% balance transfers can help to reduce your card debts...
0% balance transfer credit cards offer people with credit card or store card debts the financial breathing space away from hefty interest charges to start repaying their outstanding balance.
0% balance transfer credit cards can save you a small fortune in interest costs.
But, 0% interest doesn't only mean saving money in interest charges - it also means you are able to repay your balance a lot quicker.
Even repaying just the minimum amount required - which has always been a big no-no as you're basically just repaying interest and no capital - will actually start reducing the amount of money you owe.
However, in order to make the most from your 0% balance transfer credit card you should really try to repay as much as you can comfortably afford to each month and use your time at 0% to knock chunks off your debt.
How much can I transfer to a 0% balance transfer?
With a 0% balance transfer credit card the idea is to transfer all of your existing credit card debts from other cards that are charging interest on your balance, and instead wrap them all into one more-convenient balance on your new 0% balance transfer credit card.
Whilst there is no real limit to the amount of card accounts you can transfer money from, the amount that you will be able to transfer onto the 0% balance transfer credit card depends on the credit limit that you are given, as you will only be able to transfer debts up to the specified credit limit.
Don't be put off if you can't transfer all your card debts to one 0% deal though, transferring as much as you can will still save you money in interest on that amount of debt.
How to make the most from the 0% balance transfer
Once you have transferred your balance/s onto your new card, it is time to start making an impact on your debt. As with other types of credit card you will be asked for a minimum repayment on your debt each month, and this is the amount that you must pay in order to avoid charges or losing the 0% promotional rate.
However, the whole idea of transferring a balance onto one of these cards is to try and get rid of the debt without incurring further interest.
Therefore it is best to repay as much as you can each month in order to clear the balance in full by the time the interest free period expires.
The interest free period offered can vary from one card issuer to another, so this is something to look out for when comparing 0% balance transfer credit cards.
Choosing a card with a long 0% period will give you more time to repay your balance - though if you know you'll only need so many months, remember to look at the cost of the transfer too, as longer length 0% deals tend to be coupled with higher transfer fees.
What if I can only repay the minimum amount?
Even if you can only repay the minimum amount required there is no reason not to make use of a 0% offer.
The real bonus of 0% balance transfer credit cards is that with no charges in interest, any payment you make - however small it may be - will still go towards repaying your balance and won't get swallowed up in interest charges.
However, there is another option for anyone who knows they will need a long time to repay their outstanding balance and may not want the hassle and risk of having to continually move between 0% deals.
Life of balance transfer credit cards offer a low rate of interest until you have cleared your balance in full.
Whilst they may not be 0%, the interest rates are still much lower than any standard rate and with no time limits on how long the low rate will last, you can take as much time as you need to repay your transferred balance.
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