Martin Lewis has issued an urgent 'stop' warning over credit card interest, urging Brits to switch to a balance transfer credit card instead.
The Money Saving Expert says a balance transfer card could save £1,000s compared to paying interest, and on a £1,000 debt it could cut around £120 from interest charges in a year.
A 0% balance transfer card charges no interest for a set period, meaning more of each repayment goes towards clearing the debt. A small transfer fee usually applies during the set period.
This means you become debt-free quicker, as more of your repayments reduce the debt rather than paying off interest.
Recommended cards
Lewis advises getting the HSBC card, which has a definite 36-month 0% period, a 3.09% fee and a 24.9% representative APR after the 0% deal. Anyone who applies by August 10 and transfers over £500 will get £25 cashback.
He warns that some cards are described as 'up to' a certain 0% period, meaning some applicants receive a worse deal.
Virgin Money and eligibility
He also recommends a Virgin Money card, which offers a definite 36-month 0% period with a 3.1% fee.
Lewis notes that you cannot transfer a balance between cards from the same bank or banking group, so this affects who you can choose.
He advises: "work out how long you'll need to clear your debt, and check which card(s) you're eligible for (as you'll need to pass a credit check as part of any application)."
He adds that most cards are only available to those with good credit scores, but some options are open to people with a patchy credit history.
