FOOL'S EYE VIEW
Ten Crafty Card Tricks

"There are two types of people in this world: those who use their credit cards, and those who are used by their cards." (with apologies to Oscar Wilde and many others!)

There are dozens of ways to get ahead in the plastic-card pursuit, but your personal circumstances govern which tactics will work best for you. Of course, as with every game, you need to understand the rules if you're going to play to win.

The most important question to answer is, "Do you pay off your bill in full every month?" If you do, the world's your oyster and you can use your plastic to make you money. If you aren't a "full payer", you're a borrower and, as with all borrowing, your goal is to minimise your interest bill and other charges.

Let's get straight down to the nitty-gritty. Here are five tips for each group:

Five tips for borrowers

1. Slash your interest bill to zero

If you don't pay off your credit-card balance every month, you'll pay interest of, say, 1.5% a month. That doesn't sound too bad, does it? Aha, but it adds up to 19.6% APR, which means a balance of £1,000 will cost you roughly £200 a year in interest!

The good news is that you don't have to pay a penny in interest on your card debt. All you need to do is to apply for one of the sixty or so cards that charge no interest on balance transfers for an introductory period. Simply ask your new card issuer to transfer your existing balances, and you can avoid paying interest for up to a year. Most cards offer 0% for up to six months, but here are four of the best deals:

Just one word of warning: you'd be wise not to buy anything on your balance-transfer card, as new purchases normally attract interest at anything up to 25%. Keep it safe somewhere and don't be tempted to use it! Also, watch out for balance-transfer fees, which a growing number of card firms are introducing. As these fees can be as high as £50, you'd be better off using a fee-free 0% card on most occasions. None of the three Best Buys listed above charge transfer fees.

2. Lifetime balance transfers

If you can't be bothered to become a "rate tart" by recycling your balance from one 0% card to another, one alternative is to find a long-term low-rate deal. Why pay annual interest of, say, 20%, when you can pay as little as 3.9% APR on a lifetime balance-transfer deal? This article explains how these cards work. Here are five of the Best Buys in this category:

3. Shuffle your deck

You may find that a poor credit history or a low credit score mean that you keep being turned down for credit. Although this may prevent you from getting a new credit card, it's not the end of the world. What you can do is to shuffle your debts around to put the maximum amount on your cheapest credit card. So, if you have over £1,000 of credit remaining on a card charging, say, 12.9% APR, ask this card company to send £1,000 to a card that charges more, say, 19.9% APR. In this example, you'd save £70 a year.

Also, it's worth calling your current card companies to see if they'll slash your rate or give you a one-off 0% deal. They are paranoid about losing cardholders to their rivals, so getting a reduced rate or a special deal is usually fairly straightforward. In any event, there's no harm in trying!

4. Avoid nasty minimum monthly repayments!

Credit card companies are nothing if not cunning. A long time ago, they realised that they weren't making much money by setting their minimum monthly repayment too high. Until the Nineties, most card issuers insisted that you repaid a tenth (10%) of your balance each month. These days, they only ask for 2% or 3% a month, which means that it takes infinitely longer to pay off your balance.

Be warned: if you do pay off your debt at 2% or 3% a month, it could take you almost FORTY YEARS to repay a debt of £1,600, as this article demonstrates! Instead of going down this road to ruin, set up a standing order for an affordable monthly repayment, say, £100 a month. Paying a flat monthly amount that's greater than the minimum repayment will reduce your debt that much faster.

5. Watch out for hidden penalties

When it comes to fines, credit-card companies are worse than traffic wardens! You risk being fined, say, £25+ for exceeding your credit limit, paying late or bouncing a repayment. You can avoid this hassle by keeping a close eye on your spending and by paying by Direct Debit.

Also, watch out for hefty charges for using credit-card cheques. Using one of these oh-so-convenient cheques usually means paying a transaction fee of up to £35, so only use fee-free cheques. What's more, withdrawing cash from a cash machine or over the counter is an equally bad idea. Cash withdrawals incur an upfront charge of around £3 plus steep rates of interest from day one until your entire balance is repaid. Yikes!

Five tips for full payers

1. Earn money as you spend

As a full payer, you don't need to worry about the interest rates that cards charge. Even better, you can get credit-card companies to pay you to flash your plastic. All you need is a cashback card that refunds part of your spending, usually in the form of a yearly cheque. Most rebate 0.5% of your spending, or £1 for every £200 you spend. Note that you can use these cards alongside store loyalty cards, which means even more points or vouchers.

Here are three of the Best Buys: