Martin Lewis issues credit card warning and the ‘core weapon’ to use and beat high interest charges

MARTIN Lewis has warned credit card holders to take advantage of a “core weapon” to avoid high interest charges.

The founder of MoneySavingExpert.com (MSE) is urging people with credit card debt to cut their repayments.

1

In the latest MSE newsletter, the consumer champion said: “The average credit card interest rate for purchases has jumped four percentage points over the last year.

“Now it’s a shocking 34.7% (so £347 interest on £1,000 static debt over a year), according to financial information site Moneyfacts.

“So check what you’re paying now – frankly, if it isn’t 0%, you need to see if you can fight it.

“The core weapon is a balance transfer.

“That’s when you get a new card that pays off debt on your existing card(s), so you owe it instead but at 0% interest—this means your repayments clear the actual debt, not just mostly cover interest.”

What is a balance transfer credit card?

Balance transfer credit cards could be a useful option if you have debt spread across a few different cards or soaring interest rates.

They allow you to move the balance from other cards onto a new one, and you pay no interest for a set period.

This means your debt is easier to pay off because money saved on interest can be used to put toward owed finances.

It’s important to note that you can’t transfer a balance between cards from the same bank.

How to find the best deals

You should always use an eligibility calculator before applying, that’s because every credit card application leaves a mark on your credit file and can affect your credit score.

The best cards currently available include one from Barclaycard which is offering a 28-month long 0% deal with a 3.45% fee.

Lloyds Bank is also offering up to 27 months at 0% with a fee of between 3.2% or 3.4%.

To assess all the available cards, visit price comparison websites like MoneySavingExpert’s Cheap Credit Club or Compare the Market.

Once you run your details through an eligibility calculator and you’ve been shown that you’re likely to be accepted, make a formal application.

To do this, you will need to provide your name, address and email address as well as details of your income so a provider can assess your eligibility.

You will also need to provide details of how much money you want to transfer to the new card, but you can often do this after you have been accepted.

If your application is approved, you will need to transfer the balances within a set period, usually around 60 or 90 days.

Your old balance will then be cleared and you can start making interest-free repayments on your new card.

This post first appeared on thesun.co.uk