Valentine’s Day is coming up and, in addition to being an opportunity to do something nice for your beloved, it can be a lovely bright spot in the middle of winter. Whether you’re buying your girlfriend a piece of jewellery or taking your mum out for a nice dinner, it’s a good idea to pay for your Valentine’s Day gifts with credit cards. Here are three reasons why.

1. Credit Card Rewards

If you have them, cash back credit cards or rewards credit cards are often the best credit cards to use for making your purchases. Even if you have the cash to pay for your purchases you should consider using your rewards card instead, remembering to pay off the balance at the end of the month. If you pay by credit card, you will reap the cashback or other rewards, and if you use put aside the cash you would have spent and use it to pay off your balance at the end of the month you’ll avoid paying interest charges as well.

2. Credit cards with 0% interest rates

With a 0% purchase card, you can buy a pricey item and take your time paying it off without worrying about interest. These cards are by far the easiest way to “borrow” a few hundred pounds for a special purchase. Some of today’s 0% cards offer lengthy zero per cent interest periods.

One example is the Tesco Clubcard Credit Card, which offers 0% interest on purchases for 13 months, 0% interest on balance transfers for 9 months, no annual fee, and 500 extra bonus Clubcard points for signing up. When you first get a 0% purchase card you could set something up to send you a reminder before the 0% period ends. That way you’re less likely to miss the deadline, which will result in your interest rates reverting back to your standard APR, so any balance still outstanding will start to accumulate interest charges.

3. Credit Card Purchase Protection

Your protection under Section 75 of the Consumer Credit Act of 1974 offers you great protection if something goes wrong with the purchase of goods or services. With your Section 75 protection, both the credit card company and the company you made the purchase from are equally liable if something goes wrong, providing the item cost between £100 and £30,000. You do not have to seek compensation from the retailer first, though this is often the easiest way to get the problem sorted, and you are covered if the trader has gone out of business.

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Are you planning on making a major purchase in the next few months?

If the answer is yes, there are four ways a credit card can help you:

1. Purchase Cover

The best credit cards for purchases will typically include complimentary ‘purchase cover’ when you use your credit card to buy goods and services. This ensures that your items will be replaced or repaired if they are stolen, lost or damaged within a certain period from purchase. If you don’t use a credit card to pay for your item, you won’t benefit from this cover.

2. 0% credit cards mean no interest

There are a lot of 0% credit cards available to borrowers. This means that you can typically benefit from paying no interest on your purchase for between 4 and 9 months. Why not spread the cost of your big ticket purchase over several months without it costing you a penny more?

3. Extra insurance

If you pay for any travel – flights or a holiday – using certain cards, you may benefit from free travel insurance for you and your family. The best cards for purchases include insurance which will cover you in the event of delay or cancellation. Paying for your trip using your credit card is often worthwhile simply to benefit from this additional benefit. However, bear in mind that it may only be very basic cover so be sure to compare travel insurance too to be confident you have all the cover you need for your trip.

4. Credit card rewards

If your credit card is linked to a rewards scheme, you will receive reward points or cash back based on the amount that you spend on your card. Even if you repay the credit card balance straight away, you may still generate hundreds of rewards points simply by buying the item on your credit card. As many schemes pay points linked to the value of the transaction; the more you spend, the better the rewards.

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If you want to save the most with your credit cards, then comparing credit cards a month or so before your 0% introductory offer runs out is usually fine, as far as letting you minimise your interest charges without causing credit agencies to sit up and take notice of your activity.

Many of today’s low introductory offers last for 12 months or more and applying for a new card to take advantage of a great balance transfer rate, when it’s time for a rate hike on your card, shouldn’t cause problems with your credit history.

Some consumers worry that taking advantage of special credit card offers will cause lenders not to want them as customers, but that is not so. Lenders get fees every time the card is swiped, whether or not you carry a balance.

If you’re considering switching, consider cancelling cards that you are not using and then wait a month for your credit report to update before applying for a new card. You may or may not elect to cancel unused cards, because in some cases having more credit available to you than you actually use can boost your credit rating. On the other hand, having too many cards can make lenders reluctant to offer you more credit – it’s a fine line so be careful where you tread.

In general, however, switching one or two cards once every nine months to a year will not harm your credit rating, as long as your borrowing isn’t out of control. Even if you have multiple low interest cards, there’s no guarantee lenders will continue to offer these deals. Therefore it is extremely important to consider how you would manage your debt should you start having to pay higher interest.

If you have run up a credit card balance with last year’s Christmas shopping or at January sales, and you’re using a high interest card, then you should definitely look for a low interest balance transfer card, assuming you don’t already have a wallet full of credit cards and it’s been at least three months since you last applied for a card. In fact, credit card issuers expect plenty of new applications for credit in the early months of the year as consumers look for ways to cut the interest they are paying on credit cards.

So while there is no fixed answer to how often you should compare credit cards, if you’ve carried the same high interest card for a year or more, then you could save yourself a lot of money by comparing and switching. It’s generally a good idea to wait six to nine months to apply for another card after you’ve just opened a card, to avoid extra scrutiny from the credit reporting bureaus.

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Some of the requirements of the Consumer Credit Directive (CCD) have already come into effect, and others must have been implemented by today, 1 February 2011. Many consumers are unaware of the changes that are coming, even though these changes can help consumers make better credit card choices.

One of the biggest changes is the changeover to what is called positive payment order. Before the CCD, most cards allocated payments to the balances with the lowest interest rate first, causing the balances with higher interest rates to stay unpaid longer, greatly increasing the amount of interest card companies could collect. Now the payment order must be so that consumers clear their most expensive (interest-wise) balances first (Nationwide and Saga have always used the positive payment order system).

Another change brought by the CCD is the introduction of a “representative APR.” This is an interest rate that has to reflect at least 51% of the business the credit card company expects from a particular ad, including all cost of credit information, such as balance transfer fees and annual fees. If more than one interest rate is applicable (such as a different balance transfer and purchase rate), the rate that applies to the most common payoff method has to be shown. With 0% credit cards, annual fees (and any other fees) must be calculated into a representative APR.

Also, if the 0% balance transfer rate lasts for a short time, the duration of that period, as well as the rate it will to when the 0% offer ends, should be shown. This should make it easier to compare credit cards. If you have credit cards, it is important to understand that the changes from the CCD are fundamental changes to how credit card interest rates are calculated and advertised. Ultimately, the changes should help consumers choose more wisely among the various credit products.

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How much did you spend at Christmas? And how much of that was on your credit card?

Recent research from ING Direct found that, in 2009, the average person ended up £380 in debt covering the cost of the festive season. Brits spent an average of £490 over the holidays and it took them, on average, eight weeks to pay off the debt.

However, half a million Brits were still paying off their Christmas debt the following December. So, what are the best ways to manage your Christmas spending?

0% balance transfer credit cards

If you used plastic to fund your Christmas, the total cost of your festive season could end up being significantly higher than you think. If you end up paying interest on your balance for a few months, your Christmas could end up being extremely expensive. Many credit cards charge interest rates of between 15 and 20 per cent.

So, why not consider transferring your credit card balance? There are lots of interest free credit cards in the market and these cards offer you a 0% balance transfer cards (typically 12 to 16 months). By using interest free credit cards you can clear your Christmas debt without paying a fortune in interest.

Head online to compare credit cards

The best way to research and compare credit cards is to head online where there will be the best range of 0% balance transfer credit cards for you to consider. When looking at interest free credit cards, make sure you take into account:

• How long the 0% interest rate is for (and make sure you expect to be able to pay your Christmas balance within that period)
• Whether there are any fees for transferring the balance
• What the standard ‘go-to’ interest rate of the card is (in case you don’t manage to repay the balance by the end of the interest free period)

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As Britons struggle to earn decent interest on their savings, many of them are saving by slashing the interest they’re paying on debt and 0% balance transfers are one way of doing this.

Some of the best credit cards available have generous 0% balance transfer options today.

Here are 4 facts you should know about zero balance transfer cards:

1. You can transfer more than one balance on to a balance transfer card. As long as you don’t exceed the balance transfer limit on the new card, you can transfer multiple balances to it.

2. A “life of balance” card is an alternative worth considering. These cards offer very low interest on transferred balances, with no deadline by which it has to be paid off as long as you meet the minimum specified monthly repayment. If you can’t pay off a balance on a 0% card by the time the 0% offer ends, this may be a good choice. Our Balance Transfer vs Low Rate Credit Card Calculator will show you which type of card you are more likely to save money with.

3. The Consumer Credit Directive requires APR information to factor in balance transfer fees (from 1 February 2011), making it much easier to compare credit cards and ensure you’re getting the best deal.

4. There are more 0% balance transfer cards than any time since 2007, so now is a great time to switch. Many of the top 10 credit cards offer 0% balance transfers, and the terms are often very generous. For example, Barclaycard’s Platinum with Balance Transfer credit card has a 17 month 0% interest period for balance transfers!

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One of the places that Britons have cut back on their expenditures is travel. When budgets are tight, giving up holidays is one way that people cope financially. But, you can use credit cards to earn airline miles and trade them in on plane tickets once you have enough of them.

Here are 3 advantages of airmile credit cards:

1. Maxing out the airmiles by choosing a card for a specific airline.

Airline sponsored credit cards let you focus your accumulation of miles on one carrier. If the airline has a hub in your city, this type of card may be a good choice. Airline-specific cards give you the most control over the routes and destinations.

2. Flexibility should you choose to use “points” in other ways.

If you choose a bank-sponsored card, rather than an airline specific card, you can accumulate points toward plane tickets and you will have the flexibility of choosing an airline. In many cases, the minimum mileage required to earn plane tickets is lower.

3. Other perks are available too.

Sometimes airmiles cards come with competitive interest rates and some come with 0% balance transfer offers. Sometimes you can use store-branded cards, like Tesco’s, to rapidly accumulate points (which can be traded for airmiles) by shopping in their stores.

There are plenty of credit cards offering airmiles, and the fine print differs among them, so be sure to compare credit cards before signing up.

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There’s always something we can do to make our financial picture rosier in the future, even if we’re dyed-in-the-wool savers. Here are 5 tips to save money in the new year, Try them and you’ll be a money saving expert.

1. Don’t settle for simply renewing your insurance.

Yes, it’s easier to continue your home or car insurance but, in this economy, loyalty is often unrewarded and often the best deals are for new customers. Always compare insurance when your policy is about to be renewed. It’s easier than ever to do this online, and a few minutes of your time could save you hundreds of pounds over the year.

2. Look for the best savings deals and don’t be afraid to switch.

Once again you’ll have to work hard to make your savings beat inflation this year. You should regularly (perhaps make it a quarterly ritual) compare savings accounts and see if your money could be working harder for you elsewhere. But, be sure to read the fine print. Switching out early can void previous earnings if you inadvertently break the terms of your current savings account.

3. Cut your credit card expenses.

If you have decent credit, search for a 0% balance transfer card and use it to consolidate your debt. You will be charged a balance transfer fee of around 2 to 3% of the balance, but that is far less than what you’ll pay in interest on the balance your other credit cards are carrying if you leave it where it is. Right now Barclaycard is offering 17 months’ interest-free balance transfers with £20 off your balance transfer fee.

4. Set up an arranged overdraft with your bank.

If you’re switching banks, choose one where you can get an interest-free and fee-free arranged overdraft. This one step can easily save you over £100 this year.

5. When shopping online, always check for promotional or discount codes before you check out.

Try myvouchercodes.co.uk, vouchercodes.co.uk, or simply search for vouchers and codes using a search engine. This is a very easy way to gain discounts and sometimes free shipping, and it takes next to no time.

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Most people are understandably wary when it’s time to open up the first round of bills after the Christmas holiday season. It’s hard not to get caught up in the excitement of the season, and many of us overspend on our credit cards. So how can we minimise the damage to our personal finances?

There are some very positive steps you can take to cut down on the amount of interest you pay if you have a decent credit history, steps including using 0% credit cards and balance transfer credit cards.

Sometimes 0% credit cards and balance transfer cards are one and the same, but other times a card will offer either 0% purchases for a limited time or 0% balance transfers for a set time, but not both. We’ll assume you’ll use them separately.

If you apply for and receive a 0% purchase card, you’ll pay 0% interest on purchases for a certain time period – usually around six months. If you can find one of these with a cashback feature and you are able to pay off the entire balance before the 0% rate ends, you can actually pocket a bit of money from these cards once the offer is over. At that point, you will need to decide whether to keep the card or cancel it.

With a 0% balance transfer card, you’ll pay a balance transfer fee which will be around 3% of the amount you’re transferring. So if you’re transferring a balance of £600, you’ll pay around £18 to do the transfer. But this is much, much less than you’ll pay in interest if you proceed to pay off the £600 before the 0% balance transfer ends.

With these cards, purchases are charged at a typical interest rate, and used to be paid off after the balance transfer is paid off (only until the end of 31st December 2010 because new rules came into force on 1st January 2011 saying that credit card providers have to put your payments towards the most expensive debt first, in this case purchases, rather than the cheapest debt first), so you used to be highly advised to use such a card only for the balance transfer, and to use another card altogether for purchases.

From 1st January it may still be worth heeding the tips to not use a balance transfer credit card for purchases. This is because the time it takes you to pay off the purchase debt accumulating the higher interest charges will then eat into the time you were initially given to pay off your 0% balance transfer debt – the money you do pay off will pay off your purchase balance before your 0% balance tranfser balance.

Use 0% credit cards and balance transfer cards with discipline, and you can save serious money in 2011.

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We all want to spread the financial burden of Christmas shopping so that we’re not faced with huge bills due at the beginning of the New Year, and to prevent interest charges accumulating. Try these three tips, and you can make it easier to spread the cost of your holiday purchases.

1. Use a 0% purchase credit card for your holiday spending.

There are a number of credit cards you can obtain at no annual fee that have introductory 0% purchase offers. The 0% time period varies among issuers, so choose one with the longest introductory 0% period. Don’t go crazy with it though! You still have to pay off the charges; you just have a longer time to do so without paying interest.

2. Take advantage of 0% credit cards with balance transfer offers.

Choose a 0% balance transfer card, transfer your balances and don’t use it for other spending. That way you keep it simple by starting with a certain balance and paying it down without adding other charges to confuse things.

3. Most importantly, pay off those balances before the 0% interest period ends.

If you don’t pay these cards off before the 0% interest period ends, you could be in for a shock when the interest rates jump and suddenly you owe far more than you thought.

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