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UK consumers have staggering levels of debt. Consumer borrowing has grown by more than 50% in five years. It's no wonder that people are looking for new ways to ease the debt burden. Credit card jumping offers one possible solution.

Money Saving Device

People who are carrying large amounts of debt can save hundreds of pounds in interest simply by taking advantage of the latest credit card balance transfer deals. Many of these offer a 0% interest rate for a fixed period, such as three, six, nine or even 12 months.

As well as transferring balances from other credit cards to a 0% credit card, consumers are sometimes able to transfer balances from store cards and even outstanding loan amounts. It is worth checking to see if these transactions also benefit from the 0% balance transfer rate.

Transferring a balance to a 0% credit card means that any payments made are paying off the principal rather than the interest. This reduces the amount owed, which is good news for those using this as a debt management method. Many card issuers do charge a balance transfer fee to curb the practice of credit card jumping, so it is worth looking around for the best deal.

Getting The Best From Credit Card Jumping

To get the best from 0% credit cards, many savvy consumers move from card to card when the preferential rate period expires. This requires some organization, but credit card jumping can mean that debt balances continue to go down as consumers move money (or rather, debt) from card to card. Those who don't move their debt at the right time often find they are paying a much higher interest rate - and the debt is not being cleared. This strategy works best when consumers pay on time. Late payment can result in fees that increase consumers' level of debt.

Consumers who are using many credit cards to manage their debt should consider creating standing orders to manage payments automatically. It is also worth using a spreadsheet or calendar program to keep track of when it is time to move to the next credit card.

Other Incentives

Credit card jumping can be an effective way of reducing debt, providing consumers do not add any new debt. There are also other incentives for using 0% cards, such as charitable contributions, rewards points, air miles, travel insurance and much more. It is worth shopping around to get a reward as well as the interest-saving rate.

Summary

Credit card jumping can be a good strategy for people who are:
1. organized about managing debt
2. trying to clear a large debt
3. prepared to shop around for the best balance transfer deals
4. able to pay on time consistently so as not to damage their credit rating.

There certainly are 0% credit cards – but that does not mean they can be used with complete abandon. A useful golden rule to remember is that practically any credit card can be 0%, provided you pay off the balance of any spending before the interest is applied. The only exception will be those cards that start accruing interest from the moment of purchase. Since the latter are relatively few and far between, they can be relatively easily spotted – and avoided if necessary.

The majority of credit cards offer a period of up to 59 days between making a purchase with the card and the application of interest on that purchase when it appears on the relevant month's statement of balance. Although this will indicate the minimum amount that must be made (or a penalty for late payment will be imposed) the whole of the outstanding balance must be cleared if you wish to avoid paying any interest. It takes a certain amount of discipline, therefore, to ensure that your use of a credit card remains at 0% interest.

Another way of avoiding paying any interest on credit card purchases is to switch to one of the many providers offering 0% interest. Such is the competition still among card providers that there is a large selection of cards offering this enticement. The actual number available at any one time is difficult to pin down, since offers change from time to time, but there will generally be around 100 different types of card to choose from.

Of course, the zero-interest offer is for a limited period of time – no business can offer free credit indefinitely. This cards currently available offer periods of between 3 and 15 months of interest-free use for purchases. Though by no means a general rule, those that offer the longer interest-free period will be the ones with a higher standard rate of interest once the introductory period is finished. Beware, too, that although purchases using the card might be at 0% interest, cash withdrawals are unlikely to be. The same goes for use of the card overseas, where interest is likely to be charged at a higher than standard rate.

The main danger in taking advantage of such introductory offers is simply forgetting when the interest-free period ends and ensuring that any balance on the account is cleared before then. This date is, clearly, something to be written large in your diary!

Even if you have run up quite a large outstanding balance on your card it is still possible to pay 0% interest on it. This can be done by the simple expedient of transferring the balance to one of the many other credit cards offering 0% interest on balance transfers. Although a one-off charge is likely to be made for such a transfer, once made, however, you have secured a period in which to repay the transferred balance without having to include any interest payments. Although some such cards will also offer an interest-free holiday on both the transferred balance and new spending on purchases, by no means all of them do. If you do not, then your repayments are likely to be going towards the repayment of the transferred balance, while interest on the new purchases continues to accumulate. It pays to beware of this, therefore.

Once again, it will also pay to keep firmly in mind, or have a reliable reminder system, for the end of the 0% period. If you have not managed to repay the whole of the balance on the card during this period, then it could be time to start the whole process again (and pay the further charges) to transfer the new balance to yet another card in order to continue enjoying the use of 0% interest credit cards.

Article Source : Credit Cards After Bankruptcy

Gemma Stanbury has sinced written about articles on various topics from Credit Cards, Finances and Health Insurance. Confused.com is one of the UK's biggest and most popular price comparison services. Confused.com helps consumers save money on everything from to. Gemma Stanbury's top article generates over 18100 views. to your Favourites.