Credit-crunch Christmas

Credit cards generally give a few weeks to clear the bill for new purchases before starting to charge interest - but some offer interest-free for up to a year: a great help at Christmas
Credit cards generally give a few weeks to clear the bill for new purchases before starting to charge interest - but some offer interest-free for up to a year: a great help at Christmas.

Who can get 0 per cent? Most deals are only on offer to new customers and, with only one month before Christmas, card applications should be made straight away. Tesco’s Clubcard credit card offers 0 per cent on purchases for 12 months, plus Clubcard reward points. Sainsbury’s credit card offers 10 months interest-free and Nectar points.

Where are the best deals? Christmas debts run up on an existing credit card could also be switched to a 0 per cent "balance transfer" offer. Virgin gives 16 months at 0 per cent on transferred debts, while Abbey has a 15 month offer. However, such cards also generally charge an upfront fee of about three per cent for transferring the debt.

What’s the catch? During the 0 per cent period, you still need to pay the minimum monthly repayment to avoid being hit with penalties. You could also budget to repay a fixed amount of the debt every month so that the full balance is cleared by the end of the interest-free period.

Make a note of the date the 0 per cent deal finishes and work out a couple of months before whether you will be able to pay off the debt. If you can’t, think of transferring the remaining balance to a new 0 per cent offer.

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