Zero Percent Interest Cards For Life On Balance Transfer

1 in 5 will carry a credit card debt throughout 2011

According to research from Gocompare.com, 22 per cent of consumers will carry a credit card debt throughout this year with 7 per cent still paying for Christmas 2010 beyond June 2011.

However, with the nation's collective credit card balance standing at £61 billion, only 14 per cent of consumers switched credit cards in 2010 and 12 per cent of credit card holders have NEVER switched their card provider. 29 per cent of survey respondents said they'd resolved to reduce their loan and credit card costs this year.

With card providers trying to tempt customers to switch with extended 0% balance transfer deals two new offers from Barclaycard and Nationwide could signal a battle for the 86 per cent of Brits who didn't switch their credit card provider last year.

One of the easiest ways for people with good credit histories to save money is to transfer the balance from an interest paying credit card to one with a 0% introductory period. You will usually have to pay a charge of around 3% of the balance which is added to your debt but after that your balance will be interest free for the duration of the introductory period as long as you don't use the card for other spending or cash withdrawals and you keep within the card's terms and conditions.

A consumer transferring a £3000 balance to the new Barclaycard with an 18 month interest free period for balance transfers could save £586.00.

Barclaycard have launched a card offering 0% interest for 18 months on balance transfers with a fee of 2.9%. However, that fee will be reduced by £20.00 for transferred balances of over £3,000. Consumers will not be able to transfer balances between two Barclaycards and the rate will revert to 16.9% APR at the end of the introductory period.

Earlier this week, Nationwide replaced their Gold credit card with a new Nationwide credit card offering a 17 month 0% interest period for balance transfers and 6 months 0% interest for purchases. The balance transfer fee is 2.95% and the rate will revert to 15.9% APR at the end of the introductory period.

Consumers who will take longer than 18 months to clear their balance may wish to consider a deal with a low interest rate for the lifetime of the debt. MBNA currently offer the ‘Rate For Life' card with a rate of 5.9% for the life of the debt with a 1.5% balance transfer fee.

John Miles, business development director of Gocompare.com, said: "The nation's credit card debt is now around £61bn with around 70% of that bearing interest. There are now several deals available offering interest free periods of over a year and others with low APRs for the lifetime of the debt. Transferring a balance from a card with a high interest rate could be an excellent way to kick start getting rid of your credit card debt for good.

How to Transfer a High Interest Balance to - The Dough Roller

Ack in the day, you could find a no fee 0% balance transfer credit card without much effort. And just recently, Discover offered a no interest deal for 12 months with no balance transfer fee. That offer has now expired, and all zero interest balance transfers today charge a fee, which generally ranges from 3% to 5%. But if you are willing to put in a little effort, you can get a free balance transfer credit card. In fact you can find a card that will actually pay you to transfer a high interest balance onto their zero percent card.

The first step is to find a credit card that offers 0% on purchases . With these offers, you can use the card for everyday purchases and pay no interest on your balance during the introductory period (which is typically 6 to 15 months). And unlike transferring a balance, there is no fee for using these cards to make purchases.

So let’s look at an example. We’ll assume you owe $10,000 on a high interest credit card. If you transferred that balance to a card with a 5% transfer fee, you’d increase your debt by $500 to $10,500. Depending on the length of the offer, this still may be better than paying interest, but we can do better.

Instead of a transfer, start using the 0% credit card for everyday purchases. These would include groceries, gas, prescriptions, clothes, and other things you would need to buy anyway. And then take the money you would have spent on these items and pay down your high interest card. Depending on your debt level and how much you spend each month, this process may take a couple of months. But otherwise the result is identical to a balance transfer, but without hundreds of dollars in fees.

Now let’s talk about how you can actually get paid to transfer a balance. There are several credit cards available that not only offer 0% on purchases, but also cash back rewards when you use the card. And some of the top cards even offer cash bonuses. Here’s a list of cards to consider: