January is traditionally seen as a month when people struggle with money after overspending during the festive season.



However the New Year has arrived so now is the perfect time to get your finances back into shape which means switching to a 0% balance transfer credit card. That way you can put a temporary stop on your interest while you get to grips with your debt.

The first three months of 2008 are expected to be a frenetic period for the balance transfer market as card holders take control of their Christmas borrowings.

If you're planning to get in on the act, here's a couple of things you should bear in mind: first, to benefit from a 0% balance transfer credit card you'll normally have to pay a balance transfer fee.

For the best 0% credit cards this will cost you between 2.5% and 3% of your balance but I think that's a relatively small price to pay compared with how much interest you'll save. If you transfer, say, the average balance of £2,666, the fee will be between £66 and £80 -- far less than the interest you would pay on most cards over a year.

Second, the interest-free period will be limited, after that time interest will be charged on any remaining balance at the typical APR. That means the interest rate could suddenly be hiked from 0% to around 16% on average, so try your best to redeem your balance in full before the 0% period comes to an end. If you can't do that, it makes sense at that point to transfer the outstanding amount to a new 0% credit card to sidestep interest again.

Fortunately, interest-free periods are getting increasingly generous with some running for more than a year. Better still, the longest interest-free period- available from the Virgin Money Credit Card - now runs for a full 15 months giving you plenty of time to chip away at your balance.