Back in the “old days” before credit cards were so widely used, most people would hang on to the credit card they qualified for, regardless of how high the interest rate was. But with competition, you can save yourself hundreds or even thousands of pounds in fees and interest if you compare credit cards and are careful about how you use them. There are lots of good reasons why you should compare cards, particularly when it is so easy to do online.

For one thing, you can cut out a lot of interest by using a balance transfer credit card with a long 0% balance transfer rate. Right now the Barclaycard Platinum comes with a 20-month 0% balance transfer offer for new customers, the longest 0% term available. While there is a balance transfer fee of 3.2%, that still represents a huge saving over the average 16.9% interest rate on credit cards. If you already have a Barclaycard, MBNA has an 18-month 0% balance transfer card with a 2.88% balance transfer fee.

If you were to shift, say, £2,000 on to the Barclaycard, you would be charged £64 for the 3.2% fee. You could pay £115 per month and pay off that debt in 18 months. On a card with a 17% interest rate, you would have to pay £126.66 per month to pay it off in 18 months, so over the 18 month period, you would save around £280 in interest by switching, with a total saving of £216 once the £64 balance transfer fee has been taken care of.

Be sure that you understand the difference between a 0% balance transfer card and a 0% purchase card. Often, 0% balance transfer cards charge interest on purchases just like regular credit cards. This means that you should only use it to pay of a transferred balance. For new spending, you should consider a 0% purchase card.

With 0% purchase credit cards, you can make purchases interest-free for a set period. The Tesco ClubCard credit card, for example, has a 13-month 0% purchase period. This could be good if you are planning a big purchase, such as a new flat screen television. If you used your 0% purchase card to buy a television for, say, £750, you would have 13 months to pay it off without having to pay interest. You could pay £58 per month and have it paid off in 13 months and avoid interest altogether.

With either 0% balance transfer cards or 0% purchase cards, you must make sure you pay the balance off on time. With many cards, once the period is over, you start paying interest that would have accrued during the 0% period as well as new interest, so be sure to read the card’s terms and conditions carefully and avoid going past the 0% period.