Chamelon Cards

Chameleon cards

With the average adult holding two to three credit cards and often switching every six to twelve months, many of our wallets could be mistaken for resembling a Chameleon with a host of brightly coloured, ever changing cards on the go.

When organising our credit card finances the temptation is to keep switching between zero per cent balance transfer cards. Virgin Money for example offers a card on which you pay 0% interest for the first fifteen months on balance transfers and while these cards can serve a purpose there are good reasons to stop switching and start afresh.

Life of balance cards

The zero per cent balance transfer card can offer a welcome break from making repayments at APRs of sixteen per cent or more, but they do come with a cost.

Every time you move on to a new card you’ll have to cough up as much as three per cent of the balance. So, if you’ve got a card debt of £2,500 this could be as much as £75. The temptation is then to put off actually making any repayments on your £2,500 while the debt isn’t growing.

If you’re stuck in this cycle and want to get out and clear your debt then a life of balance card could be the best solution. A life of balance card offers a flat rate of interest at a lower rate than you would normally pay on other types of card. The average APR on the top ten life of balance cards comes out at 12.4% whereas the average APR on the top ten balance transfer cards comes out significantly higher at 15.3% for example.

Amongst the life of balance cards there are also significantly stronger deals. The Barclaycard Simplicity Credit Card’s APR is just 6.8% meaning that you could be tackling your debts in the most affordable way.

A conservative card choice

A life of balance card could also be a good choice for someone taking out a card for the first time. If you get into the habit of making monthly repayments from the outset, in this case at a low rate, then you could avoid ever accumulating a large amount of debt.

This discipline has to be weighed up against the benefits you might gain from different types of cards. If you were to take out a cashback card for example you could be earning a percentage of everything you spend back as a cash sum.

Fees

If you want to shift your credit card debts then be careful not to miss repayments. This may sound obvious but research from MoneyExpert.com found that in the past six months alone, millions of us have missed payments.

Every time you miss a payment your card provider will fine you £12. Adding to your credit card debts in this way is not recommended, particularly as the missed payment could be registered on your credit record and prevent you from getting the best card deals at later date, or even being eligible for them at all.

Get a life

It’s all too easy to forget about our credit card debts while we’re paying zero per cent interest on a balance transfer card, but sooner or later you are going to have to start paying this off. If you’ve run out of zero per cent deals to take then make sure you pay these debts off at the lowest rate possible with a life of balance card. With rates starting from as low as 6.8% you should find that payments are manageable and so long as you don’t miss payments you’ll soon get the satisfaction of seeing your debt reducing each month.

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