Credit cards can be great if they are used correctly. These top ten tips for switching credit cards will set you well on your way to getting the most out of your plastic.

Contents

1. Shop ‘til your rates drop
2. Give the balance life
3. Don’t be a big spender
4. How low can you go?
5. Say goodbye to your overdraft/loan
6. A million faces
7. When will it end?
8. Memory of an elephant or a goldfish?
9. I promise to pay the bearer on demand the sum of...
10. Bye bye balance

1. Shop ‘til your rates drop

At this time of the year there will be plenty of deals offered to people in this situation. Credit card companies will fight hardest now to get your custom so interest-free periods are likely to be long.

Our comparison table will help you to do this as it details all the best offers in one easy to use table.

Make sure you shop around and weigh up the pros and cons of each card. Check out customers’ credit card reviews to help you make your decision.

Once you have made your decision, use our quick and easy compare credit cards service to really speed things up.

2. Give the balance life

Fed up of switching at the end of countless balance transfers? Are you paying out more in transfer fees than on paying off the balance on your card?

If the answer to both of these questions is yes, then you might want to consider a life of balance credit card.

If you transfer your balance to a life of balance credit card, you will be given a much lower APR which will last until you pay off the balance on the card in full. The APR is often at least half that of a standard card.

Click here for the best balance transfer credit cards

3. Don’t be a big spender

A common mistake made by those who transfer their credit card balance to a new credit card is to later use the card on purchases.

If you do this, the credit card company will put your payments towards the balance with the lowest APR first. This means that the balance being charged at 0% APR will be paid off first and the purchases you make at, for example, 12.9% APR will be paid off last.

Compare 0% purchase credit cards

4. How low can you go?

A couple of years ago, credit card companies introduced balance transfer fees. Now, when you transfer your balance to another card, you are charged anywhere between 2% and 3% of the amount to be transferred (with a minimum fee of £5). This fee is then added on to your existing balance.

When you look for a card to transfer your balance to, bear this transfer fee figure in mind and work out how much it is going to cost you to transfer over your credit card balance. Make sure that this amount is less than the amount you are going to save on not paying interest for a year.

Compare low APR credit cards

5. Say goodbye to your overdraft/loan

Are you currently paying interest on your overdraft? Or, do you have a small loan that you are paying interest on?

If the answer is yes to both of these questions then you too could benefit from getting an interest free credit card with an 0% interest period. Of course, the amount you transfer would be subject to a balance transfer fee, but this may still work out cheaper than paying a full year’s interest on the overdraft or loan.

If you are going to get a credit card in these circumstances, bear in mind the amount of time you are likely to need to pay off the balance. Also, don’t get stuck in the trap of making minimum repayments, just because you can. Try to pay off as much of the balance on the card as you would have done if you were still being charged interest.

6. A million faces

When you are looking for a card to transfer to, bear in mind that one company may operate a number of cards. For example, MBNA run all of the football club credit cards, plus the Virgin card has been rebranded under the MBNA name. The RBS Group operate the NatWest, RBS and Mint credit cards.

Because of this, the operator may not allow you to balance transfer to another one of their cards as sometimes you are only allowed to have the interest-free offer once. It is up to their discretion to allow you to do this.

View our credit card providers here

7. When will it end?

Another thing to consider is when the new interest-free period will end. Cards tend to come with interest-free periods of around 12 months, although the range is between six and fifteen months.

Try to shop around for the longest interest-free period, but don’t allow this to become the only thing you compare across the board.

Consider the time of year when the 0% offer will end. Does this coincide with a time that is particularly expensive for you? Shop around for the best deal based on what suits you the most.

8. Memory of an elephant or a goldfish?

Be sure to set a reminder for when your interest-free period ends. If you keep this date in mind, you will be better able to budget your repayments so that your balance is paid off in full by the end of the interest-free period.

If you haven’t paid the balance off in full, the reminder will allow you to consider your options and sort your situation out before you get charged a lot of interest.

By this point, you will have had the card for a year and have built up a credit history with the company. If you have made your repayments on time, they will want to keep your custom. If you speak to them after the interest-free period, they may offer you a lower APR on the remaining balance.

9. I promise to pay the bearer on demand the sum of...

The card you transfer to may have different repayment conditions than your previous card. Whereas your existing card stipulates that your minimum repayments must be 5% of the balance with a minimum repayment value of £5, the card you want to transfer to might say that you have to pay back a minimum of 10% a month. Check that you can afford the repayments before you transfer your balance.

10. Bye bye balance

Try your hardest to clear the balance in the interest-free period. Work out the maximum you can honestly afford to repay each month and try to stick to it. As an incentive, match the extra you spend and put it in a savings account for that something special you really want.