Credit card companies make a lot of money out of their customers. Isn't it time to turn the tables?
Ask anyone who's in debt how they got there and you'll probably find it was mostly down to using a credit card. I would imagine more people get tripped up through using plastic than any other form of borrowing.
But credit cards aren't all bad and, in fact, there can be some good reasons for using them.
Interest-free balances
Unless your credit rating is shot to pieces, it is quite possible to transfer existing credit and store card debts to a card that charges no interest for an introductory period. By transferring current debts you can cut your interest bill to zero for up to a year. In fact, if you play your cards right you needn't pay interest at all if, just before the introductory period ends you find another 0% card and switch again.
Interest-free purchases
There are scores of cards offering interest-free periods on new purchases too. So, even if you don't have any existing card debts, you can save money by deferring your spending for anything up to a year. Buy everything you can on your card but put the cash you would have spent into an easy access high interest savings account. When the introductory period is up use the savings to pay off the card in full and enjoy spending the interest you've gained.
Get paid to spend
If you never borrow on your cards, why not get paid for using them instead? Shop around for a card with the highest cashback or most lucrative reward scheme but check the small print before you sign up. Some pay more the more you spend, others only pay an introductory rate and others still will cap the amount they'll pay. However, only go for one if you always pay off your cards in full every month.
Protect your purchases
Under the Consumer Credit Act 1974, when you make a purchase with your credit for goods over £100, the credit card company is also liable if the goods or services are faulty. So if the retailer won't replace or refund your money you can then take the matter up with your credit card provider.
Extended warranties
Several credit-card companies will give you with a free extended warranty on household appliances purchased using their card. Given that shop-bought extended warranties are usually a complete rip-off, this free benefit is certainly worth having - and using.
Obviously, the precise combination of interest rates, interest-free periods and benefits is different for every card and we all have different needs and wants. You'll have to make your own mind up as to what you require. And, remember, debt is debt whether it's interest free or not.
More: Find the right card for you in our Credit Card Centre
