The only problem with not paying and defaulting, causing debt recovery etc is that you’re credit score will be permanently affected by your actions.  Financial institutions will no longer tolerate bad debts and often go to extreme measures to collect their payments.  This is why you should really attempt to pay off your balance before anything worse happens.

There really is no way to stress this more, you cannot spend any more on your credit card if you are trying to lower your balance.  People try to lower their credit card balance because they are struggling to pay off the minimum payment.  This is when you swap your balance to a 0 percent interest on balance transfers credit card.  This way you don’t pay any interest and every payment you make off your balance will count.  This is why you cannot under any circumstance believe that you have been afforded an opportunity to spend more money.  Credit card companies will also try to make you spend money by offering you 0% on your purchases, but you must remember that this offer is usually only for 3 months and as soon as that period is over you will begin to make interest payments on what you’ve spent, even if your balance transfer gets no interest.

Lets just say that you travel a lot with work or on vacation (you can be one of the lucky ones!)  When you fly you can pay for flights with your credit card, and if you have a credit card such as Amex that allows you to add up free airmiles with the money you spend on your card, your credit card spending actually leads to you saving money on flights.  This can soon add up when you travel a lot; you simply need to get a card that gives free airmiles with every purchase you make.

Alternatively you could have a credit card that just rewards you with cash.  This way you can spend your benefit on anything you want, even paying your credit card bill if you really want!  However, there are credit cards out there such as the Barclaycard that have rewards systems like the one called Freedom.  This reward system allows you to gain cash credit on your credit card with every purchase you make and then you can choose whether or not to redeem this credit at any future purchases you make.  This is the future of credit rewards and pretty soon every card will be like this in our opinion.

The other thing is that these cards only ever differ depending on what you have on them (your balance).  If you have a huge balance then your payments are likely to be a lot larger than someone who is only transferring a smaller balance.  There are benefits to transferring both levels of credit card balance here and neither is better than the other, and they both carry the same risks.

You might think that this is absolute rubbish and that obviously the smaller balance is the better one to have.  You could well be right, but i’d also like to point out that this smaller balance could quite easily become the large balance if the credit card you are swapping it to offers 0 percent interest on purchases for three months.  If you haven’t been too good with credit then there is no reason to think that you won’t spend this available balance; and because your transferring balance is small you’ll have some room to spend no doubt.  Now, if you have a balance that doesn’t allow you any extra room to spend money then you will be paying more off in the form of minimum payments, but at least it won’t get any bigger!

There are literally loads of credit cards offering 0% interest on your balance transfers, but it’s up to you to find the right ones isn’t it?  You really need to look for the ones that offer 0% for the longest time; but here is an important point to remember: you need to make sure that you don’t end up having to pay a fee on your balance before you transfer it.

The fees on your balance transfer can sometime be quite a lot depending on your balance.  And if you don’t think you’re going to be able to clear that amount within the interest free time and still cover the fee then it’s not worth your trouble transferring it really is it?  Make sure you do your maths firts and then all will be be fine.

The best ones are the ones that won’t charge you a fee and offer you a minimum of at least 12 months.  Anthing less probably isn’t worth it so i would personally leave it well alone.

So when you’ve got a big electric bill or a huge phone bill, what do you do?  You panic, that’s what you do, and you have to get on the telephone and complain about not having enough time to pay your charges.  You can’t very well transfer your huge phone bill to another provider can you and expect to not pay it for a year?  I know it would be lovely wouldn’t it?

No, what you end up doing is winding yourself up about how all those people have got money and you haven’t.  Well the answer is to move the credit card bill and pay the other bills instead.  Once you have the other bills paid off you can concentrate on paying off the credit card bill because it’s much easier with 0% interest on the balance.

When you have used up your 0% interest rate over the 12 months (or some of them actually offer 15 months these days) then you can move your balance again with any luck to another credit card company in order to get another 12 months interest free.

Well you needn’t fear when it comes to 0% on purchases because it literally means that you don’t pay interest on the things you buy (purchases).  Now that sounds pretty good doesn’t it?  However, there are a few things you need to be aware of and a few things you need to watch out for.

You will often get 0% interest on purchases when you get a card that offers 0% on balance transfers.  This you need to watch out for because if you’ve switched your balance because you can’t afford the interest and you’re intending to pay it off (or at least a good chunk of it) then you really don’t need to be paying interest on anything else do you; particularly not your purchases.  I say this because there is often a difference in the amount of time you are given interest free on your balance transfer and the 0% interest you have offered on your purchases.

A common one here is 0% interest on balance transfers for a whole year, and 0% interest on purchases for 6 month.  You see where the catch is.  After those six months you start to pay interest on a credit card bill that you originally swapped to avoid paying interest.

No one likes to pay interest on the credit card do they?  And to be honest, when you’ve amounted a huge credit card bill, you really want the interest to go away.  If you do it with a credit card that charges no interest for a year on your balance transfer then you’ll have a better chance of paying off your huge balance sooner or later, or at least save up to pay off a few monthly payments when they start coming in again.

So compare the interest rate by all means when you go shopping for a new credit card, but if you’re looking for a credit card that offers 0% interest on your balance transfer the most important thing to be looking out for is the length of time you can get it with 0 interest.  If it’s only 6 months then you’re not likely to save much money at all are you?  You really need to aim at a year or more with no interest payable.  When you so this it should set you up with at least a chance to pay off some of your huge debt; just don’t make the same mistake again.

Let’s have a close look at what Virgin have to offer:

• 18.9% APR
• 0% interest on your credit card balance for a whole year.  Sadly this comes at a cost of 2.98% of the balance you want to transfer.  This might lead to you not actually making much of a saving if your balance is particularly high.  Remember that the best way to pay off a balance of a credit card when you swapped it over to a 0% interest card like this one, is to stop spending money on it.
• An excellent 0% interest on all purchases for a whole year too!  This is a rare offer and i must admit that i haven’t seen many credit cards offering this.  But again however, if you’re swapping balances to pay off that credit card balance that you have been so far unable to get rid of, this excellent offer could land you in even more trouble when that first year is up!
• Rewards on shopping and of course the Virgin Wine Club (not a lot of good if you don’t drink really!)

Well that’s what the Halifax think, and this is how they intend to give you that little bit of breathing space from your over inflated credit card balance:

• 0% interest on balance transfers for those transferred within the first 90 days of opening the Halifax Plus credit card account.
• 16.9% typical APR
• 0% on purchases for 3 months.  This isn’t a good idea however if you’re trying to lower your credit card balance with a transfer.
• Card replacement service available.
• Online fraud protection; this is absolutely essential these days and cannot be underestimated.
• No annual fee
• And online account management.  Having a credit card is often hard, particularly when you lose track of your spending and your balance.  This is an essential tool for managing your finances.

This is a great credit card for those who have a balance they think they’ll be able to clear within the time allowed by Halifax Plus.  If your balance is huge you might want to consider a plan and have another credit card ready to take on the balance when the interest is finally added by Halifax; however at 16.9% Halifax Plus isn’t too bad when compared with some others as high as 19.9%!

Well the reward card of choice these days seems to be the cashback one.  There are plenty of them out there to choose from, but personally i like the credit card reward scheme from Barclaycard call freedom (i think).  You can get hold of a Barclaycard and transfer your balance over providing that you’ve been paying the payments and you’re not in debt (Barclaycard don’t suffer fools lightly!).

The reward scheme from Barclaycard is simple.  All it doesn is add the cashback to your card so that every time you make a purchase you can see how much you’ve earned and you can choose to take it off what you’re buying there and then.  This could work out pretty damn useful if you’re a bit short of money for something but you just happen to have a little bit left on your credit card to spend.

So don’t leave your balance there on that credit card building interest for no reason.  Get rid of the interest for a year and get a good credit card that can give you something back for all your hard spending!