Archive: MoneySavingExpert's Money Tips Email

Martin's NY credit card cost-cutting masterclass
Don't wait for a statement, sort card debt NOW. Today's 31mth 0% debt shift deals are the longest since 2023

Can't afford to clear the debt? You can't afford not to check if you can shift it to 0%. Many save £1,000s

Happy New Year. Sadly, many people will be starting the year with a financial hangover, awaiting Christmas's credit card bills due to drop through the door. This debt can feel depressing, dangerous, and debilitating.

Even though it may feel hard to face, the sooner you tackle it, the sooner it can be improved. So don't wait for a statement, each day's delay just adds more interest, deal with it now. I'll take you through the best deals, how best to use them, and how to get free help if you're in debt crisis.

As Trevor emailed last year: "Hi Martin & co. I was paying £300 for two credit cards, costing £76/mth interest. I took out a 28mth 0% deal and transferred both balances to it for a £164 fee. I'll have it all paid off in 15mths, saving me a bankroll. Bangin'! Keep it coming." (A near £1,000/yr interest saving.)

A 0% balance transfer is where you get a new credit card to pay off debt on your existing cards, so you owe it instead, but with no interest. This means more of your repayments reduce the actual debt, rather than just cover the interest charge - getting you debt-free quicker (just don't borrow more).

As lenders know January is 'debt month', they've pumped out a stronger suite of deals to try to win your custom, so you can now shift debt so it's interest-free until midway through 2027, yet...

1. To protect your credit history, apply via our eligibility calc to find who'll accept you. It shows which cards you're most likely to get, minimising applications to protect your credit score.
2. Go for the lowest fee within a 0% period long enough to clear the debt. Longer balance transfers usually have a bigger one-off fee, so if you can go shorter it's cheaper. Unsure? Play safe & go long.
3. Usually rejected when you apply? MSE's free Credit Club (available via the MSE App on Apple | Android) can analyse the problem, plus you can also access our eligibility calc there.

If you can't get the top cards, our eligibility calculator will show alternatives, including some specifically for those with patchy credit histories. Some even accept those with past defaults or county court judgments (CCJs).

There's a big thing to watch though... the interest rate after the 0% ends could be higher than 34.9%. So compare that to your current card's rate. If your current card is lower, ONLY shift debt you're certain you can clear within the 0% period, so you're not stuck at the higher rate after. If your current card's the same or higher, shift as much as possible.

Getting the right card's just the start. Here are my golden rules...

a) NEVER miss the minimum monthly repayment. Or you can lose the 0%. Preferably pay it by Direct Debit (you can opt to pay a fixed monthly amount) so you never miss it. If you want to vary what you pay each month, for safety set up a Direct Debit for the minimum, then make manual overpayments on top of that each month.

b) Clear debt before the 0% ends. Clear it or transfer again before the 0% ends or you'll pay the representative APR, which with all these cards is at least a costly 25%.

c) Don't spend/withdraw cash on the card. It's usually at the costly APR, not the 0% rate, and it's best not to build up other debt while trying to repay what you've already got. It can also make it harder to access credit in the future.

d) Do the transfer at application. It'll then contact the lenders and transfer the debt for you. If you don't do it then, cards normally have a 60- or 90-day time limit to do it, so check that.

So those are my golden rules, but I get lots of questions too, so let me try and pre-empt some of them...

• Should I apply if my best eligibility score's only 20%? Cutting debt costs is important (usually only trumped by a mortgage application), so go for it. While 20% odds are low, it means it's likely two in 10 who apply will succeed - and it could be you. And if you're rejected, barring a minor credit file application mark, you're no worse off.
  
  As (a different) Martin wrote in our forum last month: "I've tried many times to get a decent 0% balance transfer card and have never been eligible. After your recent newsletter, I tried again and was accepted for a 30mth 0% card... so I can transfer over my expensive debt. Many thanks for your tools that let me do this."
  
  
• What if the credit limit they give me isn't enough? In most cases, you won't know your credit limit until after applying, though some cards in the eligibility calc will show some people a guaranteed credit limit before applying.
  
  If you find the limit given after applying is too low, while it's frustrating, don't just sack the card off. The application is on your credit file, so shift as much of your highest APR debt as you can to the new card (usually you can move up to 90% of the credit limit).
  
  Then, once done, go back to the eligibility calc to see your chances of acceptance for other providers' cards to move the rest. Though each subsequent application can get harder, especially if done quickly, as too many can indicate you're desperate for credit.
  
  
• Should I pay an equal amount on every card (spoiler... NO). List all your debts in APR order from highest to lowest. Include your overdraft if you have one (as these days overdrafts are often the most expensive form of mainstream borrowing).
   
  Then, if possible, focus every penny of spare cash at trying to clear the debt with the highest interest rate (APR), as it's growing quickest, and just pay the minimums on all the others. Once the highest one is clear, shift focus to the next highest.
  
  If your overdraft is the highest APR, just pay the minimums on the credit card, and let the cash sit in your bank account to reduce it, until the overdraft is gone (see Cut overdraft costs for more options).
  
  
• What if the eligibility calculator says I've "no chance" for all cards? That can happen, especially for those on lower incomes or with a poor credit history (see how to improve it in MSE Credit Club).
  
  Yet if your credit limits on existing cards aren't full, try to see if you can shift debt from one card to another if it's cheaper. So if one credit card charges 18%, and has half the credit limit left, and the other card is at 30%, ask the cheaper card's firm if you can shift debt from the more expensive one to it, saving you cash. Even better, some cards also have 'existing-customer balance transfer offers', eg, 12mths at 0%. See the credit card shuffle for how it works.
  
  If none of this is a goer, the priorities are repaying in the right order, as I explained above, and reading this section below...

The tips above are for those who can afford to meet their credit card payments and want to make them cheaper. If you can't, you'll likely need a different tack. I devised these three simple questions many years ago as a snap test...

1. Do you struggle to meet minimum monthly payments or pay all bills?
2. Is your total debt (not mortgage/student loan) over a year's salary?
3. Do you have sleepless nights or depression/anxiety over debt?

If you answered yes to any of these, I'd forget balance transfers, you need a stronger intervention, so get free, one-to-one debt-counselling help from Citizens Advice, StepChange, or National Debtline. They have powers to give you breathing space on your debt, or can put you in a repayment plan or similar. While this may impact your ability to access credit, it's usually worth it to get you out of the debt hole.

And if you need emotional support, try CAP. They're there to help, not judge. The most common thing people tell me after going is: "I finally slept last night."

And don't feel alone, there's no stigma, you can sort this. Read inspiring stories in our Debt-free wannabe forum, and see our Mental Health & Debt and Debt crisis help guides.