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If you’re experiencing difficult debts, confusing credit cards or inscrutable ISAs, then our economics expert is here to help. Why not write to OurExpert@CreditChoices.co.uk
Andy Williams is our Online Savings Expert at CreditChoices.co.uk and can assist with all monetary matters no matter how big or small, from piggy banks to re-mortgaging and beyond.
Our expert says...
All credit card issuers now charge a fee for balance transfers, usually between two or three percent of the actual balance itself. With a balance such as yours though Edgar, charges tend to ceiling at around the £50 mark, although some cards carry no upper limit. Choosing a card with an imposed balance transfer fee restriction of £50 (such as the Morgan Stanley 'Buy and Fly' Card) will already save you around £70 in fees.
Be realistic about the length of time needed to clear your balance. If it’s going to take longer than a year then the Virgin Credit Card is a more than viable option, offering 0% on balance transfers for fifteen months. The Goldfish Credit Card is also a worthy consideration for long-term balance transfers, boasting a 4.9% balance transfer rate until December 2010. This allows you the best part of two years to get the balance cleared at a low rate of interest.
There are a few rules that you should follow when clearing outstanding credit card balances:
(1) Make sure that clearing your credit card balance is the number one priority. Once the 0% interest rate runs out, it’s the balance that suffers the highest rate of interest. If you’re wondering whether to pay off your debts or save, then the sensible option is to get those debts paid first.
(2) Consolidating Credit Card debts into loans may appear to be a useful temporary fix but it’s a bad long-term move. The interest rates set for these loans are sky high and the terms are often unfair. My advice is to give debt consolidation loans a wide berth.
(3) Don’t bury your head in the sand, by prioritising your repayments you can save yourself money. Why not visit our Debt Centre for more advice on debt management.
