All credit cards charge interest, but you can avoid paying it by using your card smartly
The best way to avoid paying interest on your credit card is to pay your bills on time – a great way of not forgetting is to set up a direct debit to pay off your balance in full at the end of each month.
Most credit cards come with an interest-free period of some kind, meaning that you won’t start paying interest on your shopping until around 56 days after your purchase.
Some cards offer much longer interest-free periods as a way of enticing new customers – these are known as 0% purchase credit cards, with some deals lasting for well over a year before you start paying interest.
Transferring your balance to an interest-free card
If you want to move an existing balance so you can take advantage of 0% introductory rates, you’ll still have to pay a balance transfer fee of around 3% of the amount transferred.
However, you could still save a significant amount simply by having a break from paying standard credit card interest – read our tips to find out more about 0% balance transfer cards.
The key thing with balance transfer cards is working out whether the cost of the transfer fee will outweigh the benefits of a 0% deal. If so, transferring your balance to a card with a low APR could be cheaper in the long run.
Multi-purpose credit cards
If you can’t decide which type of credit card is best for you, you could consider one which offers a long 0% period on both purchases and balance transfers.
Some cards on the market currently offer 0% deals on both aspects for longer than 12 months, while other cards give reward points to use towards flights, holidays, and brands like Amazon, Boots, and M&S.
As ever, these cards are only suitable if you’re able to pay off any debt accrued by the end of the 0% deal.