No such thing as a fee free credit card

Beware of high transfer fees

Over recent years balance transfer fees have been edging upwards from around 2% to 3%. Despite having to pay a transfer fee on the outstanding balance, it's still cheaper than having to pay an interest rate of around 12.9% or 15.9%. Eventually your 0% deal will come to an end and it's time to switch again. Ideally, you should start to look around six weeks before the end of your current deal.

In today's tight credit environment, you may not get the deal you want or the credit limit you want; you may have to stick with your current credit card provider for longer than you think. Thats why it's important to check out the go-to rates once the 0% deal ends before you sign up for a new deal.

Compare your existing credit card with the best on the market - see what you could save!

Love to travel?

People who travel regularly should look for credit cards that don't charge for overseas transactions. Where Abbey's card does come up trumps is on the savings on the foreign exchange fee, which is payable every time you use your credit card overseas.

Abbey's normal charge on overseas transactions is 2.75%. Coupled with the 0% on purchases and cash advances, the Zero card could be an ideal summer holiday card as long as you repay the balance within the six month offer period. But, once again, Abbey's card isn't the only one. Nationwide Building Society and the Post Office don't charge for overseas transactions.

Going abroad? Find the best Card for use overseas.

Always pay more than the minimum

The worst thing you can do with a credit card is pay of the minimum each month. It will take you forever to pay off and cost a fortune. It has been calculated that paying the minimum 2% on a £1,000 balance would take 20 years and six months to pay off the debt, presuming a monthly interest rate of 1.5%.

Pay by direct debit

To get the deal you want you have to stay creditworthy and have a squeaky clean credit history. So avoid taking on too much debt, don't apply for several cards at the same time, avoid late and missed payments and look after those PINs. To make sure your credit card bill is always paid on time, pay by direct debit. This prevents late payments and late fees; and keeps your credit history in good shape.

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Karen Beavis
29 April 2008 © Moneyextra.com

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