How to obtain 0% interest payments on your credit card
If you are in a position to clear the outstanding balance on your credit card each month, then that’s good.
However, if you find that you can only pay a portion of the amount owing each month or only the minimum amount, the interest on the outstanding balance can accrue at an alarming rate. You could be paying as much as 18% interest per annum on your outstanding balance. For example on a debt of £4,000 that would be £720 per annum.
To get around this problem you could apply for credit cards that advertise a promotional rate of 0% interest payments, usually for a limited period ranging from six months to one year. The credit card companies do this to generate new business and increase their client database.
You can transfer your full balance or part of it depending on the credit limit the credit card company sets for you. This will give you some breathing space for the duration of the interest free period as you will only be paying off the actual sum that you have spent.
You should make a note of the date when the promotional offer period ends. If you still have not managed to pay off your debt/s by this time or have incurred further debt/s then look around for further promotional deals of 0% that might be in the offing. In this way you can manage to stave off paying interest on interest.
Remember that you will only be paying 0% interest on the balance transferred, although some credit card companies will offer 0% interest on purchases within a certain period e.g. within the first three months of the balance transfer if you use their card to make the purchases. Remember too, to make at least your minimum payment before the due date each month as you may otherwise lose your promotional rate (always check terms and conditions).
However, note that credit card companies now charge a fee, typically between 2% to 3%, for accepting a balance transfer. So, using our aforementioned example on a balance transfer of £4,000 the fee at 2.5% would be £100. But even on a six month interest free period, you would still save £260.00.
Click here to view our selection of recommended credit cards in the UK, including 0% balance transfer credit card offers.