Beating the crunch

The news from the financial front line is not good. Petrol prices are tipped to scrape the £2 per litre mark in some places before long and food prices are soaring. Gas and electricity bills are on the up and up despite record profits for providers, and you can’t even escape the gloom with a cheap trip to the continent as the pound languishes against the euro.

All in all things are not rosy for the consumer, and sadly it seems the storm is far from over. With the heavy spending summer now upon us many may have to have a serious financial re-think.

MoneyExpert.com can help you get the ball rolling with some top money tips.

The bills, the bills

With last summer proving such a washout it wasn’t surprising to see millions of us escaping to warmer climes. Many of us will have used a credit card to fund the expense not long before switching the balance to a new 0% deal.

Time may have flown by but if the above sounds familiar then the 12 months offered by many providers will soon be up. Unless you clear the balance or switch to another credit card provider then you’ll see a sudden hike in your monthly bills with APRs as high 18%.

If you’ve been using a new purchase deal credit card to fund post-Christmas expenditure then sadly the same will probably apply. In both cases it’s time to consult the best-buy tables and make sure you’ve got the best deal available.

If you’re still looking for a decent period in which to clear your debt both Barclaycard, with its Platinum card, and the Virgin Credit Card from Virgin Money are good starting point, offering 14 and 15 months 0% on balance transfers respectively.

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Cash in hand

If balance transfers are your preferred method of choice to ease the financial strain then it needn’t only be a matter of switching from one card to another. If you’re struggling with heavy overdraft interest payments then you can effectively carry out a balance transfer from your overdraft to a credit card by performing a so-called money transfer.

Effectively you’re taking a cash advance from your credit card provider and using it to plug the flow of interest payments from your bank account. Of course many credit cards will charge a high rate of interest for such cash advances so won’t be of any use, but some will allow you to transfer cash into your bank account and still take advantage of the card’s 0% balance transfer offer.

The amount available will depend on your credit score (you may of course be rejected altogether) and you’ll almost certainly have to pay a transfer fee, though this should never exceed 3%.

As mentioned, only certain cards allow money transfers so you’ll need to be selective. Those that do include the Virgin Money Mastercard, Egg Visa, and MBNA Platinum Visa. Obviously the longer the balance transfer deal period the easier it will be to structure your repayments.

Get on track

Switching to 0% deals and using them to clear overdrafts is all well and good and a sensible way of avoiding unnecessary interest payments, but it should only be viewed as a short term way of getting you back on track.

Once you’ve found a way of limiting your interest payments it’s important to consider ways of clearing the debt that’s causing the problems in the first place. You’ll need to consider the 0% period you have and work out a repayment structure to have the debt cleared before it expires.

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