MARTIN Lewis has revealed his five-step method to banish credit card debt – including a very unusual freezer trick to make sure it stays away.
The money saving expert revealed how a 0% balance transfer credit card could help people in debt save hundreds of pounds.
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Balance transfer credit cards are a great idea if you have debt spread across a few different cards or if your interest rate is high.
These let you 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 erode the original borrowing.
But there are some rules you need to follow to make sure the trick works.
Firstly, Martin says Brits can’t usually transfer between two cards from the same group. Secondly, you should clear the debt before the xero per cent ends or you pay the higher APR.
He also says you should never miss the minimum monthly repayment – or you can lose the zero per cent.
And if youre not transferring at the application, you usually have only 30 to 90 days to do it.
Finally, he warned: “Do not spend on these cards, do not withdraw cash on these cards, it’s usually not at the cheap rate.
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“If you don’t have self discipline, get your card, get a bowl of water, put your card in the bowl of water, and put the bowl of water in the freezer.
“That way if you want to spend on this card you’re going to need a hammer to get it out of there and it’s a good way of imposing friction upon yourself to stop it.
“Finally, if you don’t transfer at application they’ll normally only give you 30 or 90 days so check how long you’ve got.”
How do credit card balance transfers work?
A balance transfer card can temporarily reduce the interest payments you make on your credit card debt.
For example, if you had credit card debt of £4,000 and were struggling to keep up with the repayments, you could clear it with a balance transfer card.
Your balance is cleared and the credit card paid off, which should give you some peace of mind.
That’s not the end of the debt though, it has just reduced the interest payments.
The money is then moved onto a new card that instead lets you focus on repayments for an interest-free period.
This should help you clear the balance faster.
You still need to repay at least the minimum amount each month. However its best to try and clear the outstanding balance before the 0% period ends to avoid paying interest.
There may also be a fee for the transfer.
How to do a credit card balance transfer
You can search for the best balance transfer credit cards on comparison websites or directly with providers online.
There are a few factors to consider when choosing a balance transfer credit card.
The main one is the interest-free period.
This tells you how many months you can repay the debt for without any interest being charged.
There may also be a balance transfer fee and a maximum number of days to actually move your money before the introductory offer expires.
Check your existing cards first to work out how much you owe, as there may be a maximum amount that some balance transfer credit cards will let you move.
In most cases, providers won’t confirm the balance transfer limit until they have processed your application.
However, a small number of providers have started offering guaranteed balance transfer limits as part of the eligibility check.
You can usually apply for a balance transfer credit card online or on the phone, and banks may be able to help in-branch.
To make an application, you will need to provide your name, address and an email 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.
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Meanwhile, Martin Lewis has warned households earning less than £40k to do urgent check.
And he reveals how thousands could turn £800 into £5,000.
