Good Deals on Balance Transfers

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When you have a credit card, you’re going to use it. As a result, you’ll probably end up racking up a tidy balance and accruing interest every month unless you’re one of those few people who pay off their entire balances. However, you can find ways to cut back on that interest if you know a few tricks.

Making Balance Transfers Work for You
Balance transfer refers to the payment of one credit card balance with another credit card. As a result, you end up with no balance on one card. Let’s say you owe £1000 on Card A and you have a high interest rate – maybe 18%. If you keep paying on Card A, you’ll end up paying off the balance eventually along with a large amount of interest. That interest adds up and makes repayment take a lot longer which means you’ll pay more interest and so on.
The only way to break that cycle is to transfer your balance to Card B, preferably a card that offers you a period of interest-free repayment. For example, the Barclaycard Football card offers 0% interest for 12 months on balance transfers. Even if you continue paying just the minimum balance – which, incidentally, is never the best idea – you’ll be able to lower that balance considerably before you begin being charged interest.

Other Important Points
You need to realise one important thing: credit card companies view balance transfers as a separate type of transaction. They usually charge less interest and offer longer periods of no interest on these types of transactions then they do on purchases. If you combine balance transfers and purchases on one card, then all of your payments will be applied towards the transfers first so you end up paying a lot more in the long run.
The best idea is to have two separate credit cards. One is just for balance transfers. The other is just for purchases. That way you can find the best deals for each separate type of transaction. With a card for purchases, you want to find a low interest rate and also any rewards you can receive for making purchases, such as a cash back option.
Now after you transfer your balance, you should work hard to pay the entire thing over the interest-free period. You should also avoid racking up large purchase debt on the other card so you don’t end up paying off one balance just to have to contend with another.