An important thing you must be aware of when using any credit card is that you should never use both the purchases and the balance transfer features, it has been claimed.
Finding the best credit card can prove to be effective when making purchases or transferring balances, but these products must be approached with caution, it has been reported.
Although many credit cards are very useful for both their interest-free purchases and balance transfer features, Jane Baker highlights in a lovemoney.com article that using the same card for both features is likely to result in a costly mistake.
The problems caused by using one credit card for both balance transfer and purchases can be substantial, she claims, is especially apparent in the Virgin Credit Card.
Although this card offers the longest period for 0% balance transfers currently available on the credit card market, its interest-free period on purchases is slightly less appealing, with only for three months.
And while the Virgin Credit Card sees borrowers receive discounts on goods and services bought from elsewhere within the Virgin Group after the 12-week offer is up, the lovemoney.com writer states that doing so could work against the borrower.
"If you keep spending on the card once the three months are up, taking advantage of all those juicy discounts, you'll fall into the negative payment hierarchy," Ms Baker claims.
However, it could be possible for borrowers to avoid being hit by negative payment hierarchy should they opt for the Halifax All In One credit card. This, she states, is because the product offers a nine-month 0% deal on both purchases and balance transfers.
She highlights that consumers should aim to have all debts associated to the card paid in full before the 0% period expires, otherwise they will find that the typical interest rate of around 15.9 per cent will be added.
Those on the search for a 0% purchases card were also advised to consider the Tesco Clubcard Credit Card, which she points out will offer interest-free spending for 12 months on the basis that minimum monthly repayments are met.
Another to sing the praises of the Tesco Clubcard was lovemoney.com writer Serena Cowdy who recently claimed that the 0% balance feature is “perfect for gradually paying back big expenses”.
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Tags: 0% balance, Halifax All In One credit card, Virgin Credit Card