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"Which credit card will get you through the New Year financial hangover?"

By admin | March 2nd, 2009 | Featured

With January now over many of us will have received our credit card bills from the Christmas and New Year periods, and whilst this will not prove a problem for the lucky ones that can afford to repay the balance in full on their cards for many others panic may be setting in.

We try and work out how we are going to repay the money that we owe and how we can avoid paying a fortune in interest on the amount that we have spent over the festive and New year season.

Unfortunately, the first four to six weeks of the year can be bad ones for many of us, as we try to get over the financial hangover from the Christmas and New Year period, but this year promises to be worse than ever for many people due to the financial problems that we were faced with last year and the financial challenges that lie ahead of us over the coming year. Many of us have probably used our credit cards more than we normally would have over the recent festive season because the financial crisis and high living costs have left us with few alternative options.

With so many people now wondering how to get around this financial issue and minimize on how much interest has to be paid, it is no wonder that this time of year sees many people thinking along the same lines, which of course means that there is a greater number of people making applications for suitable finance to cut their borrowing costs. One thing to bear in mind if you are thinking of switching your credit card debt onto a different card to cut costs and save on interest is that there is a limited number of deals on the market, and a lot of people that will be thinking of applying for them, so you need to act quickly in order to increase your chances of success.

You also need to bear in mind that the ongoing effects of the credit crunch have resulted in the credit card market being far more restricted, which means that the number of deals available has gone down, the deals have become more difficult to obtain, and lenders are being far more stringent over who they lend to. It may be a good idea to carry out a quick credit check on yourself before you apply, as many lenders will reject applications from those with damaged credit, which could in effect leave you in an even worse situation as your credit will take a further knock.

Of course, the best credit card for those that have accumulated a large amount of debt over the festive season is a balance transfer credit card, as this will allow you to transfer the balance off your high interest credit card onto a low interest life of balance transfer credit card or an interest free balance transfer card. If you think that you will be able to clear the transferred debt in six to twelve months then you may find that the interest free option is the best one, as you will not pay any interest at all as long as you repay the transferred debt in full within the specified period. However, do bear in mind that there are balance transfer fees of 2-3 percent with most of these cards.

If you think you will struggle to repay the balance within a year, and you cannot find any suitable interest free balance transfer cards that offer over a year’s worth of interest free credit, then the life of balance transfer card may be the best choice. These do not charge a transfer fee, and they charge a very low rate of interest for the life of the transferred balance, so all you need to do is ensure that you make at least the minimum required repayment each month.

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Post A Comment:

  1. These are all great ideas for working on getting out of credit card debt, especially that nasty debt accrued over the holidays. Don’t forget to let your creditors help you pay by asking them to lower your interest rates! Make it a regular practice to call your credit cards to ask for a lower rate. I have one client who owes over $20,000 on a Visa that was at 18%. He spoke with a ‘rate specialist’, touting his rising credit score and declining balance and got his rate cut in half, from 18% to 9%! His monthly interest charge was instantly reduced by $150, which will help him pay off his debt even sooner.

    Comment by Kristin Harad — March 3, 2009 @ 12:48 am

  2. If you’re taking out a loan, beware of being misled into taking out payment protection insurance. From a recent questionnaire, it appears that around 25% of consumers were under the impression that by taking out this expensive and often totally unnecessary insurance, they were actually improving their chances of getting their loan.

    Comment by missold ppi — March 22, 2009 @ 12:34 am

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