15 September 2023 , 06:00
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Martin Lewis’ MoneySavingExpert.com website has issued an urgent warning for anyone with credit card debt.
It’s all about switching your existing credit card debt over to a 0% balance transfer card, so you’ll pay no interest for a set period of time. By not paying interest on top of what you owe, you’ll become debt-free more quickly.
But MSE has warned how the best deals are being pulled due to rising interest rates. Writing in the latest MSE newsletter, the team said: “On Mon, Barclaycard shortened its longest deal by a month, today (Tue) Santander cut one deal by two months, and HSBC pulled its top fee free deal. Overall, there seems to be a downward spiral and we suspect more deals may go. So sorting sooner is safer.”
If you’re considering a 0% balance transfer card, you should use an eligibility calculator first to check which card you are likely to be approved for. MSE has a 0% Balance Transfer calculator which carries out a “soft credit search” and won’t be seen by lenders.
Only those with excellent credit scores are likely to get the longest number of months advertised. When choosing a new credit card deal, you need to be sure you can clear your debt before the 0% interest period finishes - or you’ll start paying the representative APR.
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Next, you should check if there are any fees involved when transferring your debt. If you don’t need the longest deal, there may be shorter cards available with cheaper, or sometimes no fees.
At the moment, Barclaycard offers the longest 0% balance transfer card with 29 months interest-free - but it charges a 3.45% fee. The longest card with no fees comes from NatWest - but you only get 14 months.
You should always make your minimum repayments on your 0% balance transfer card, otherwise you risk losing the interest-free period. Finally, you should avoid spending or withdrawing cash on these cards as these uses are normally not charged at 0%.