1. Only people who are already clear of their current debt should consider applying a balance transfer credit card cards. Those of you already carrying around a large financial burden should look to clear it while minimising the interest you pay, rather than doing any further spending.
2. If you’re able to clear a given balance by the end of the card’s 0% on purchases promotional period, then use your card like an unsecured loan to make purchases during this period, but without having to pay any interest on the money borrowed.
3. If you’re disciplined and sensible with your money then you can use the incentives these cards offer to enjoy discounts on the items you purchase everyday (discounts on groceries for instance).
4. Make sure you know exactly how your credit card provider is defining a ‘purchase’. Normal spending and card activity will fall under the 0% offer, but cash advances (ATM activity), online gambling, and buying gift vouchers won’t be considered a ‘purchase’.
5. The 0% on purchases period is set in place by the credit card company to encourage you to spend and make money for them. Prove them wrong by only making purchases that are essential.
6. Don’t use a 0% purchase card for balance transfers even if it has a 0% balance transfer offer. Payments made against credit card debts are tiered in such a way that you’ll pay off the cheapest or ‘free’ debt first, which in this case is likely to be the balance that you’ve transferred. If you don’t clear that balance during the 0% on purchases period, then the expensive debt left over will be hit with interest levels of around 17%. Essentially, you’re going to lose a lot of money through what’s known as ‘negative payment hierarchy’.
7. A good way to avoid confusion or losing money through interest payments is to use your credit card for one purpose only, grocery shopping for example.
8. Always ensure that you pay the minimum balance at least each month. If you don’t, then you risk losing the benefits of the promotional period and, even worse, adversely affecting your credit rating.
9. If you’re using your card for online payments only, then maybe a prepay credit card would be more appropriate?
10.  Carefully evaluate promotional periods, interest rates and introductory deals before choosing your card. Shop around, and don’t just settle for cards that are issued by your existing bank.

Tags: 0% purchase card, balance transfer credit card

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