When you’re shopping around for the best credit cards, you will probably consider one that offers 0% balance transfers if you carry a balance. It could save you big on interest charges. But the problem is that just a few companies issue most of the cards in use in the UK, and if you apply for a card that is allied with one of the companies you already have a card with, you probably won’t get the 0% offer, even if your application for a credit card is approved.

Interest free credit cards are great for people trying to get their debt under control, but card companies use lures like 0% balance transfers to attract new customers, and rarely offer the same rates to existing customers, even if they have outstanding credit histories. There’s no legal reason why they can’t do it, but they don’t do it because they see it as a draw for new customers only.

So if you were to try to get a Mint card and transfer your balance from your NatWest card, you wouldn’t be able to, because both cards are issued by Royal Bank of Scotland. MBNA issues the most different UK credit cards, with nearly 200 brands, while HBOS issues around 50 different cards.

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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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0% purchase cards can be one of your best ways to borrow money for a defined purchase. For example, if you need a new refrigerator, buying it on a 0% purchase card and paying it off by the time the 0% period ends is much cheaper than taking out a loan. Loans under about £7,000 carry interest rates of around 14% these days.

With these credit cards, there is a period of usually 6 to 12 months where you won’t have to pay interest on your balance. However, as soon as the 0% period ends, the interest rate for your balance on that day reverts back to its standard rate, so it’s really only worth taking out this type of card if you feel sure you can finish paying off your balance by the end of the 0% purchase period. When you compare credit cards choose the one with the longest 0% purchase period.

There are several ways to keep yourself out of trouble with a 0% purchase card.

First, keep the credit limit low. Borrowing more than you need is always dangerous.

Second, during the 0% purchase period, make more than the minimum payments, even though you don’t necessarily have to. If you buy something on the card for £900 and you have 0% for 9 months, aim to pay back £100 each month so the £900 is paid off before the 0% offer ends.

Third, don’t miss a payment: if you do, you can lose your 0% deal and be hit with a missed payment fee of £12.

Of course, the most important thing you have to do to borrow this cheaply is to clear your balance within the 0% period.

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Christmas can be an expensive time. The BBC reported that the average cost of Christmas in Wales in 2009 was a cool £784, with a quarter of households planning to spend between £1,000 and £5,000 on their Christmas.

So, if you are looking for a cost effective way to spread the cost of Christmas, why not consider 0% purchase credit cards?

Spread the cost of Christmas with interest free credit cards

0% purchase credit cards allow you to borrow interest free. You typically benefit from a period of between 6 and 12 months where you will pay no interest on the money you spend on your credit card.

Interest free credit cards are therefore perfect if you want to spread the cost of Christmas gifts over several months. You can buy your Christmas gifts now and pay the money back over the next few months without incurring huge interest charges.

Make sure you repay your spending before the 0% period runs out

While interest free credit cards are a great way of spreading the cost of Christmas, you should be careful to ensure that you repay your balance before your 0% period runs out.

If you don’t repay your balance by the end of your interest free period you are likely to pay your card provider’s standard interest rate, which could be between 15% and 20%.

Head online to compare credit cards

When looking for interest free credit cards, the best place to search for your new card is on the internet. With dozens of 0% purchase credit cards available, it is vital that you research your options to find the best card for you.

When you compare credit cards, look for:

• The length of the 0% interest rate period
• Any charges or fees
• Whether there is a minimum limit to qualify for 0% deals (do you have to spend a minimum amount per transaction to qualify?)

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Finding the right type of unsecured credit isn’t easy.

As well as comparing Annual Percentage Rates (APRs) you also have to take into account the term and the flexibility of the borrowing. You then have to work out which is the most affordable – and all before you even start to compare the various providers.

Credit cards and unsecured loans are two of the most common ways to borrow. Here are three reasons credit cards may be better than personal loans.

0% credit cards

One of the main advantages of credit cards is that they frequently offer excellent short term incentives. 0% credit cards are common and they offer better value than even the lowest loan rates.

However, 0% credit cards only tend to offer that rate for a short period. If you’re planning to spread your repayments over longer than your nil rate period, you might want to look for an alternative.  For short term deals, however, 0% credit cards are hard to beat.

Short term borrowing

Often, you will find you simply need to borrow over a few weeks or months. This may be to spread the cost of a larger purchase or simply to tide you over the Christmas period.

Either way, paying a small amount of credit card interest over a few weeks may be better than committing to a personal loan for a year or longer. You may well end up paying less interest in total, even compared to the lowest loan rates.

Lower monthly repayments

If you want to minimise your repayments, credit cards may be the answer. Personal loans require you to make the same monthly repayment for the term of the loan. In contrast, credit cards offer you the flexibility to make smaller repayments should you wish. Just make sure that you always make at least the minimum payment on your credit cards.

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It may only be October, but Christmas does tend to arrive quicker than we expect. Even if you’re a last minute shopper, why not take a little time right now to get your finances ready for the holiday season? Here are three easy tips:

1. Set aside a little “hands off” money each week for Christmas spending. Whether you have a special Christmas savings account or whether “Christmas savings” is spare change in a coffee can, set aside a few pounds each week. If nothing else, it will take the edge off all the spending that we do even when we vow to have a quiet holiday season.
2. Consider getting a 0% credit card for spending. There are still plenty of credit cards available that offer several months of 0% spending. If you have a large purchase or two to make, and you’re sure you can pay them off before the 0% grace period ends, you can save quite a bit of interest by putting them on a 0% card.
3. Consider a 0% balance transfer card. If you have a balance on a credit card accumulating interest day after day, why not open a 0% balance transfer card. While there is often a small fee for the balance transfer (usually around 3%), if you pay it off before the 0% balance transfer period is over, you can save big over what you would pay on your balances that are carrying interest. It takes discipline, and remembering to make payments on time, but it’s well worth it.

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Credit cards are often considered the harbingers of debt, but money-savvy consumers know how to transform plastic into gold.  Indeed, with a few smart strategies, using them can even save you money and add money back to your bank account.  Take advantage of these wise ideas to make your credit cards work for you.

Compare Credit Cards to Find One that Pays

Instead of opting for a traditional card, compare credit cards to find one that gives you cash back on every purchase.  After simply using your cash back credit card for the year you could earn a substantial amount of money.   “Since all you have to do is sign up and then spend money as you normally would, it’s a no brainer. Use and abuse credit card rewards programs and you will SAVE BIG,” advises Elisabeth Leamy, ABC News Consumer Correspondent.

However, make sure you compare cards and choose one that gives you cash back without an annual fee.  Also, look for one that does not put a maximum cap on the money that you can earn.

Take Advantage of Balance Transfers

If you currently carry debt on your card, then it may be wise to take advantage of 0% balance transfer offers.  By simply shifting your debt from one card to another, you can enjoy a reprieve in the interest rate expenses – which will allow more of your payment to go towards paying down the principal.

Read the fine print of the  balance transfer offer, as you want to ensure there are no extraneous fees that would minimise the amount of money you save from the transfer.  In addition, carefully compare credit cards to find one that has the lowest APR once the bonus interest free balance transfer period ends.

To fully capitalise on 0% offers “if you make a transfer and spend, then clear the card within three months you pay no interest” says Richard Cohen of Money Market.

“In some cases, making far more than the minimum payment could clear the spending balance while it’s still at 0%,” he explained.

Negotiate a Better Rate

If you are in good standings with you current cards, then it may be time for you to approach the negotiations table.  “Perhaps the most startling is that only 29 percent of credit card users have ever tried to negotiate their rate, even though 93 percent know it’s possible,” says  Jennifer Openshaw, Columnist for Dow Jones’ MarketWatch.

Call your card companies, discuss your excellent payment history with them, divulge how you are considering a 0% balance transfer to another company with better interest rates, and then ask if they are willing to reduce your interest rates.  To keep your business, the credit card companies may just lower your interest rate – saving you hundreds of pounds or more each year.

Credit cards do not have to eat away at your savings, as long as you employ smart strategies that make them work for you.

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