Combination 0% credit cards – don’t get caught in the debt trap

For many people a combination 0% credit card – one that offers interest free credit on both purchases and balance transfers – is the ideal choice, offering ease, convenience, and the need to carry only one card and still enjoy interest free credit. However, what many people don’t realize is that these cards can often prove to be a debt trap, and this is because in most cases the interest free period offered on purchases is far shorter than that offered on balance transfers, and this can cause problems when it comes to repayments.

When you take out a credit card that offers a longer period of interest free credit on balance transfers and a shorter period of interest free credit on purchases, you will find that the way in which your repayments are allocated by the credit company will usually result in the balance from purchases getting trapped behind the balances that have been transferred, which means that your purchase balances will be left to accrue interest whilst your repayments are applied to the transferred balances.

Unless you intend to make large repayments on your cards, whereby the balance from both your transfers and from your purchases will be cleared within the interest free periods, you could find that these cards end up being costly, as when the shorter interest free period expires your purchase balance will be left to clock up interest whilst your repayments are applied towards the transferred balance. However, you can get some credit cards these days that offer an equal length of interest free credit on both balance transfers and purchases and this effectively removes this debt trap.

If you are looking to take out just one card and still enjoy interest free credit on your balance transfers and purchases you should therefore make sure that you look for a credit card that offers equal periods of interest free credit on both balance transfers and purchases. Although these cards are few and far between there are some available, and it is worth taking the time to compare what is on offer so that you can benefit from interest free credit without the risk of suddenly finding your purchase balance clocking up interest whilst you are still repaying your transferred balance.

You can compare these interest free credit cards with ease and convenience online, and amongst the areas that you should compare are the interest free periods offered, as these can vary from lender to lender, the standard variable rate of interest charged once the interest free period is over, any transfer fees that may be applied, and the terms and conditions of the cards. You will find that some of these cards may offer additional benefits such as rewards, and this is something else to look out for.

If, however, you experience difficulties in finding a suitable credit card that offers equal interest free periods on both purchases and balance transfers then it is well worth considering opting for separate cards for your balance transfers and your purchases. In fact, this can often prove to be the most effective option, as it means that you are not restricted in the deals that you opt for, and can look for the best value 0% balance transfer card that offers the longest interest free period, and the best value 0% purchase card that also offers the longest interest free period.

By opting for two separate 0% cards – one for balance transfers and one for purchases – you will not have to worry about getting caught in the debt trap, as all repayments made towards your balance transfer card will be applied to your transferred balance, enabling you to try and clear it before the end of the interest free period, and all of the repayments made to your 0% purchase card will go towards your balance accrued through making purchases, enabling you to repay that before the end of the interest free period.

You will find a wide range of credit card companies and lenders that offer some great deals on interest free credit, such as 12 months interest free credit on purchases or twelve months interest free credit on balance transfers. However, once you take out these cards you need to make sure that you do not transfer any balances on to your purchase credit card, as your transferred balances will get trapped behind the purchase balance and clock up interest. You must also make sure that you do not make purchases on your balance transfer card, as your purchase balance will get trapped behind the transferred balance, posing the same problem.