While comparing the market to seek out the best credit card deals can to an effective method of purchasing items as well as transferring existing balances from previous credit cards using the 0% features, these cards need to be used with caution, it has been reported.
While most plastic products offer customers useful features such as 0% balance transfer and purchases, Jane Baker points out in a lovemoney.com article that using the same card for both things can prove to be a costly mistake.
The damage caused by using a single card to make both purchases and balance transfers can do the pocket, she claims, is noticably apparent when using the Virgin Credit Card.
Although the card offers the longest interest free balance transfer period currently available on the credit card market, its interest-free period on purchases is slightly less appealing, with only for three months.
And while the Virgin Credit Card sees borrowers receive discounts on goods and services bought from elsewhere within the Virgin Group after the 12-week offer is up, the lovemoney.com writer states that this may not work in favour for the borrower.
"If you keep spending on the card once the three months are up, taking advantage of all those juicy discounts, you'll fall into the negative payment hierarchy," Ms Baker claims.
However, it could be possible for borrowers to avoid being hit by negative payment hierarchy should they opt for the Halifax All In One credit card. This, she stated, is down to the extended 0% periods offered, with 9 months on both purchases and balance.
She points out that people should ensure all debts owed on the cards are paid off by the 0% period is up, or the typical rate of 15.9 per cent will apply.
Those looking for a 0% purchases card were also advised to consider the Tesco Clubcard, offering 0% on spending for up to 12 months on the condition that at least the minimum monthly repayments are made.
Another to sing the praises of the Tesco Clubcard was lovemoney.com writer Serena Cowdy who recently claimed that the 0% balance feature is “perfect for gradually paying back big expenses”.
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