Credit cards for repaying debt

23 December2010

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These days, credit cards can be useful for more than just spending. Some credit cards can also be used to make repaying debt cheaper and easier - namely 0% balance transfer credit cards.

A 0% balance transfer credit card effectively allows you to consolidate more than one credit card debt and repay the combined debt without paying interest. This has several benefits, although it`s not likely to be enough to really improve your situation if you`re genuinely struggling with your debts.

Review our latest credit card best-buys

Product	Transfer rate & period	New Purchases rate & period	Representative APR
Barclaycard Platinum Credit Card with Extended Balance Transfer	0% 26 mths 3.5% Fee	0% 6 mths	18.9% (variable)
	Representative example: With this credit card the representative APR is 18.9% (variable) based on an interest rate of 18.9% (variable), transfer fees of 3.5% and a credit limit of £1200.
Barclaycard Platinum Credit Card with Balance Transfer	0% 25 mths 2.8% Fee	0% 6 mths	18.9% (variable)
	Representative example: With this credit card the representative APR is 18.9% (variable) based on an interest rate of 18.9% (variable), transfer fees of 2.8% and a credit limit of £1200.
Tesco Bank Clubcard Credit Card for balance transfers	0% 25 mths 2.9% Fee	0% 3 mths	16.9% (variable)
	Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2.9% and a credit limit of £1200.
Halifax Balance Transfer Credit Card	0% 25 mths 3% Fee	0% 3 mths	18.9% (variable)
	Representative example: With this credit card the representative APR is 18.9% (variable) based on an interest rate of 18.95% (variable), transfer fees of 3% and a credit limit of £1200.
NatWest Platinum	0% 24 mths 2.9% Fee	0% 6 mths	17.9% (variable)
	Representative example: With this credit card the representative APR is 17.9% (variable) based on an interest rate of 17.95% (variable), transfer fees of 2.9% and a credit limit of £1200.
Royal Bank of Scotland Platinum	0% 24 mths 2.9% Fee	0% 6 mths	17.9% (variable)
	Representative example: With this credit card the representative APR is 17.9% (variable) based on an interest rate of 17.95% (variable), transfer fees of 2.9% and a credit limit of £1200.
MBNA Platinum Credit Card	0% 23 mths 2.5% Fee	0% 3 mths	16.9% (variable)
	Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2.5% and a credit limit of £1200.
Fluid Balance Transfer Card	0% 23 mths 2.89% Fee	0% 3 mths	16.9% (variable)
	Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2.89% and a credit limit of £1200.
MBNA Credit Card	0% 22 mths 2% Fee	0% 3 mths	16.9% (variable)
	Representative example: With this credit card the representative APR is 16.9% (variable) based on an interest rate of 16.9% (variable), transfer fees of 2% and a credit limit of £1200.
Lloyds TSB Platinum MasterCard	0% 21 mths 1.5% Fee	0% 3 mths	17.9% (variable)
	Representative example: With this credit card the representative APR is 17.9% (variable) based on an interest rate of 17.95% (variable), transfer fees of 1.5% and a credit limit of £1200.
Nationwide Building Society Credit Card	0% 20 mths 1.55% Fee	0% 3 mths	15.9% (variable)
	Representative example: With this credit card the representative APR is 15.9% (variable) based on an interest rate of 15.9% (variable), transfer fees of 1.55% and a credit limit of £1200.
We provide a representative range of products on competitive terms and do not act exclusively for any credit provider. Credit limits may vary depending on your circumstances.

How a 0% balance transfer credit card works

Once your application for a 0% balance transfer credit card has been accepted, your credit card provider will want to know exactly which debts you plan to transfer to your new card. Most of the time you`ll only be able to transfer balances from other credit cards, although a few cards let you transfer some other debts across, too.

Your credit card provider will then pay off the existing balances for you, and add this total balance onto your new 0% balance transfer credit card. It is then up to you to repay the combined balance.

Like any credit card, there will still be a minimum monthly repayment to make (typically around 3% of the balance or £5, whichever is higher). Apart from this, you can repay the debt as you wish - in fixed monthly payments, or as and when the money is available, for example.

However, to avoid paying interest on the balance you must make sure you repay what you owe within the 0% interest period, which typically lasts between 3 and 16 months (depending on which card you choose).

Is a 0% balance transfer credit card a good idea?

As long as you can afford to repay what you owe, then a 0% balance transfer credit card could make repaying debt much more convenient. It could even allow you to delay your repayments (bar the minimum payment) interest-free if you want to focus your finances on another area for a little while.

However, if you have any serious underlying financial problems, steer clear. If you`re really struggling with your debts, putting them onto a 0% balance transfer credit card will probably only delay the problem, and in this situation it`s generally better to find a solution that could tackle your problem head-on.

Compare 0% balance transfer and other credit card deals with our free comparison tool.

Tags: debt, credit card, credit cards, credit card debt, repay debt, repay debt with credit card, balance transfer