Credit cards with promotional 0% balance transfers allow you to transfer a debt to your credit card and avoid paying interest. Normally the interest free period is around 12 months although competition among credit card issuers means that Virgin Money is now offering a card with 15 months 0% balance transfer.

When making a balance transfer there are three things to be aware of:

1. Never spend and BT on the same card - you will be charged interest on your spend which cannot be repaid until the 0% balance transfer sum is clear. This still applies if there is a (shorter) 0% purchases offer on the card.

2. Be aware of the ‘Handling fee’ which is a percentage of the total balance transferred levied by the issuer. This is added by credit card issuers to discourage ‘rate-tarts’. For larger transfers this can be a significant sum.
3. Pay or transfer your balance again by the end of the 0% period, otherwise you will pay interest at the standard rate - usually around 15% APR. This can easily reduce the money saved in the 0% period.

Follow these rules and you will be able to take a well earned break for paying interest by using balance transfer credit cards such as those on Credit Card Today.co.uk.

Credit card issuers are offering ever better deals on balance transfers these days, which can only be good for the customer. However when you use your credit card for both balance transfers and spending this can be surprisingly expensive.

Essentially credit card providers insist that borrowers always repay the least expensive debt first, known as the ‘repayment hierarchy’. What this means is that if you take up a 0% balance transfer deal for 12 months and then spend on the same card in that time, your purchases will be charged at the standard rate (usually around 16%) while any repayments you make will only discharge your 0% debt.

By the time you have repaid your balance transfer you could have potentially incurred some significant interest charges.

So how do you avoid this pitfall? Simply take out a card specifically for the balance transfer deal, and then don’t touch it again! The golden rule is – use one credit card for balance transfers and a separate card for spending.

If you want a credit card to spend with, get a card with a low APR if you don’t always clear your balance, or a card with a cashback or rewards if you do. Problem solved!