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I cannot believe it is mid February already! Where does the year go? Time flies by in the blink of an eye sometimes. Before you know it another month has passed by and your credit card statement has arrived again. Did you overspend a little at Christmas? I didn’t – for a change! I’ve got much better in recent years at saving up in advance. However, I remember those days of dreading the credit card statement. If this sounds like you, or you’re paying interest on your credit card, then read on! I am going to tell you about how to get a 0% credit card deal. I’ll even spell out to you just how much money you could be saving with a new credit card deal.
I’m assuming that if you are reading on that telling you NOT to spend money might be like shutting the stable door after the horse has bolted. However see the bottom of this post for some tips on cutting back/getting yourself out of debt.
What is your credit card debt costing you? A 0% deal could mean you pay NOTHING extra.
Typically credit cards start off at a low fee, or fee free and then this gradually increases. Often people don’t realise, or don’t mind, that the fees have gone up. It can be easy to think ‘well, I won’t be using that anyway’ but you may have an emergency. Even one use of your card may cost you money.
The costs of using a credit card can be staggering on the wrong deal. For example if you spend £1000 at 18.9% and can only repay £50 a month this will take you 24 months to pay back. It will cost you £189 of interest. If your interest rate was 34.9% and you can only repay £50 a month it will take 30 months. It will cost you £452 of interest! These figures are staggering – imagine how much more you could be paying in interest if you stuck to the minimum. With a 0% deal you’d pay £0 interest, depending on the terms.
That interest soon adds up!
You can see just how fast the interest charges on a credit card can add up. I’m not saying that you should be using your credit card regularly, however, you should have a great deal. My husband and I have a joint credit card and we typically go for a 0% fixed deal for a set number of months. Once our current deal expires we will look for an alternative similar 0% deal and move over to that. On occasion we have found that our current credit card company can provide another 0% deal in some form. It is always worth ringing your current provider before you apply for a new credit card.
Should you want to apply for a new credit card deal, to save on interest, then check out a credit card comparison tool. You can see a number of great deals, at a glance, and the application process is fast too.
If you are going to be using a credit card you should ensure that you exercise restraint. Don’t use your credit card for wants, instead use it for needs. In the last few years some examples of what we have used our card for include vets bills and unexpected car repairs. I have used my credit card at the supermarket, when I accidentally locked my debit card. It is great to have something on hand for an urgent situation or emergency. However, I don’t use it for wants, like clothes or shoes, but needs when I can’t access other funds at the time.
There are ways that you can cut down on your credit card usage if you have become dependent on it.
Pay more than the minimum
If you’re currently just paying the minimum, and have interest as well, you could spend 10s of years repaying your credit card debt. Even a small overpayment each month can have a snowball effect. The amount of time you have the debt for could be reduced significantly. You may not be able to afford to overpay much but you can probably afford something. You could look at my favourite ways to make and save money online for a few ideas to make some cash.
Think about the purchase you are making
Do you really need to put that purchase on your credit card? Is it an essential to life? If it isn’t you probably shouldn’t be using your credit card. It can be easy to think that something is a must have but it probably isn’t…!
Be strict with your credit card use
As above really, is it an emergency? We use our credit card strictly for emergencies. We don’t put purchases on it that we can’t pay back right away either. For example if we have a large vet bill it may go on the card. It would then be paid back before the next payment date.
No self control? Involve a friend to help!
This is a technique that a friend of mine told me about a few years ago. If you cannot trust yourself not to use your card then you can do a number of things. Firstly you could freeze it in a block of ice. That way you’d have to defrost it and wait agesss before you could use it. However, I don’t think this is very practical in a genuine emergency – and who knows if your card would even work still? This is my preferred method that I suggest… *Buy a lockbox. It doesn’t have to be expensive. Just something that you can’t jimmy open with a kitchen knife. Then ask a friend to hold on to the key.
Your friend won’t have access to your house, or *the lockbox, however, you’ll have to ask them for the key. The shame of asking for the key might just stop you wasting your time/money. Now you’ll want to use a trustworthy friend so they will give you the key if you need it. However, consider telling your friend a list of suitable things that they can give you the key for.
Can you earn some cashback?
If you use a credit card comparison tool and find a great credit card deal be sure to check *TopCashBack and *Quidco. There might be cashback on offer when you save money with a great credit card deal.
Get a better credit card deal to stop paying interest
As I’ve already mentioned above you want to try and stop paying interest. Cards often move to huge interest rates after a fixed period, 12-24 months typically. By changing your credit card deal regularly you can save a HUGE amount of money. This is great for helping you get that credit card balance down to £0.
Make sure that you always exercise caution when you look for a credit card deal. Don’t be tempted to request £1000s more on your next credit card deal. Always aim to pay back your credit card in full each month. If you cannot afford this then work hard to pay back as much as you can afford. The millstone of debt is never a nice one and switching to a great credit card deal could save you lots.
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