Interest-free credit card deal coming to an end?

12 January2011

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0% interest credit cards can be a very useful thing to have, but like all good things, the interest-free period must come to an end eventually. Credit card providers are offering cards with increasingly lengthy interest-free periods, but it will always be just a matter of time before your card starts charging interest.

Interest is charged on the outstanding balance remaining on your card, so if you manage to repay the debt in full before the interest-free period ends, you won`t have to worry about it. However, if you do still owe money on your card and your interest-free period is nearly over, you`ll need to move fast if you want to avoid paying interest.

What happens when my interest-free period ends? Ideally, you`d simply pay off the remainder of the balance before the interest-free period ends - but that`s not always an option, of course.

Once your interest-free period is over, your credit card will start charging interest in the same way as a `typical` credit card, meaning you will be charged interest on the remaining balance at the end of each month.

Depending on how much you owe, you may find the situation isn`t actually that serious even if you don`t repay everything in time. As long as your debt is relatively small, you may be able to repay what you owe (plus interest) easily enough.

If you want to carry on repaying your debts without paying interest, you may be able to switch to a new 0% interest credit card deal (although you`ll probably have to pay a balance transfer fee of 2-5%). Doing this can allow you to put off repaying the bulk of the debt - if you wish, you can make just the minimum payment each month.

But don`t forget that making only the minimum repayment each month will probably take a very long time - you should always have a firm plan for repaying what you owe within the foreseeable future.

What if I simply can`t afford to repay what I owe?

If you find yourself unable to repay everything you owe at the end of a 0% interest deal, it could end up a lot more expensive than you expected, because the interest could begin to mount up quickly. In you`re worried about this, get in touch with a debt adviser as soon as possible. They`ll help you find the best way to tackle your debt and get back on top of your finances.

Review our latest credit card best-buys

Product	Transfer rate & period	New Purchases rate & period	Representative APR
Sainsbury's Low Rate Credit Card	- - 0% Fee	- -	6.9% (variable)
	Representative example: With this credit card the representative APR is 6.9% (variable) based on an interest rate of 6.95% (variable), transfer fees of 0% and a credit limit of £1200.
Barclaycard Platinum Simplicity	- - 0% Fee	- -	7.9% (variable)
	Representative example: With this credit card the representative APR is 7.9% (variable) based on an interest rate of 7.9% (variable), transfer fees of 0% and a credit limit of £1200.
NatWest Visa Low Rate Credit Card	2.9% 12 mths 0% Fee	0% 6 mths	9.9% (variable)
	Representative example: With this credit card the representative APR is 9.9% (variable) based on an interest rate of 9.95% (variable), transfer fees of 0% and a credit limit of £1200.
Royal Bank of Scotland Visa Low Rate Credit Card	2.9% 12 mths 0% Fee	0% 6 mths	9.9% (variable)
	Representative example: With this credit card the representative APR is 9.9% (variable) based on an interest rate of 9.95% (variable), transfer fees of 0% and a credit limit of £1200.
MBNA Everyday Credit Card	0% 17 mths 2% Fee	0% 7 mths	11.9% (variable)
	Representative example: With this credit card the representative APR is 11.9% (variable) based on an interest rate of 11.9% (variable), transfer fees of 2% and a credit limit of £1200.
Halifax Online Clarity Credit Card	- - 0% Fee	- -	12.9% (variable)
	Representative example: With this credit card the representative APR is 12.9% (variable) based on an interest rate of 12.95% (variable), transfer fees of 0% and a credit limit of £1200.
MBNA More Rewards Credit Card Account	- - 5% Fee	- -	12.9% (variable)
	Representative example: With this credit card the representative APR is 12.9% (variable) based on an interest rate of 12.9% (variable), transfer fees of 5% and a credit limit of £1200.
MBNA Rate for Life Credit Card	5.9% - 1.5% Fee	- -	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 1.5% 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.

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