FIVE CARD TRICK
Some people say cut down on the credit cards you have. I take the opposite view.
Get several. Some cards are very cheap for one thing – and one thing only. So
having several different cards can save you money. But never, ever,
ever use one of these cards for any
other purpose.
Card 1 – zero percent balance transfer card.
If you have credit card debt that worries you then the answer may be a card
which charges zero percent on the transferred balance for a year or so. You will
be charged a one off transfer fee – normally about 3%. That is still a good deal
if you keep the transferred balance there for a year. During that twelve months
you can pay off the debt or keep it there out of harm’s way and pay off more
expensive debts. Cut up the card on arrival.
Card 2 – low life of balance transfer card.
If you have a worrying debt but really cannot sort it out within a year then a
low life of balance card is an alternative. They let you transfer a balance and
pay a low interest rate – around 6% or 7% – on that balance until it is repaid
however long that may take. You may be charged a fee. Beware that some cards
only guarantee the low rate for a fixed period. Cut up the card on arrival.
Card 3 – zero percent purchase card.
If you know you are going to use a card to buy something expensive why not take
out a card that charges you zero percent on your purchases for up to a year. It
is a cheap way to borrow – but always make sure you repay the amount within the
interest free period and cut up the card at the end.
Card 4 – cashback card.
If you pay off your credit card bill in full every month without fail a cashback
card can make you money. They give you back between 0.5% and 1% of everything
you spend on the card. Only worth it if you never go into debt on the card as
even one month’s interest can wipe out a year’s reward. Not to be confused with
‘rewards cards’ that are generally not worth having.
Card 5 – foreign use card.
If you spend money abroad – or over the internet in foreign currency
– most credit cards add a surcharge of up to 3%. Avoid that by picking a
card which charges nothing or no more than 1% for foreign usage.
All these special deals are getting rarer. Find them through
www.moneyfacts.co.uk,
www.moneysupermarket.com, or
www.moneysavingexpert.com
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