About turn..credit card!

Everybody else has said it all Ruby. I have never done this personally but I do have one reservation. If it becomes apparent that yo are moving cards frequently; then I suspect that eventually cards issuers will decline your application as they think that you are playing the system. Which you are of course. I have one card and I aim to pay it off every month. But I have had my moments in the past!! I genuinely believe that credit limits should be very small - £1000 maximum. Easy credit is the scourge of western society.

A lot of people do this, they have a card with either 0% interest for so many months or a low rate of interest and then when that comes to running out they will shop for another deal. The reason for this is so that they can pay the balance off rather than only ever paying interest. If someone is clever with money then they can work credit cards this way. It is also what the money experts advise people to do who have debts on them so that they can clear the balance a bit quicker.

I see two problems with this: 1. Some companies charge balance transfer fees, so it can cost money to change credit card balances 2. If you don't pay off the balance that you transferred before a certain time limit, you get charged interest. And if you charge anything new, the company will apply payments to the new charges first.

I had a reasonably hefty credit card debt and I am on my third '0% for transfers' credit card and will have paid off the debt (at no interest) when the 12 months deal is over... The secret is to STOP using the card for purchases unless you are in a position to pay off the balance every month otherwise it will take forever... I have spoken about it on my blog http://www.thecreditcruncher.com/2008/07/credit-card-update.html and a I made a squidoo lens about getting out of debt http://www.squidoo.com/makingmoneyquickly (using the theory that the best way to make money quickly is to save money...) - when you look back (I started this two years ago) I have prepared myself pretty well for the credit crunch as my spending is already pared to the bone and my budgets are done.

I'm behind as normal, so I expect a thousand people have told you already about the interest free or low interest deals that many credit card companies offer to new customers as a sweetener to encourage them to sign up. Normally it's a cheap rate on balance transfers, but sometimes it's a lower APR than normal for a fixed period. Anyway, if you're a bit clever you can sign up and take advantage of the cheaper rates then move on to another credit card provider when the cheap rate ends so that you're never paying the full whack. Of course, there's so many credit card companies out there just now all deperate for your business that you could probably keep doing it for ages. All you need is a good memory and a good credit history. If you forget to move when the good deal is over then you could get clobbered with worse than average rates once they revert to their norm again. And you need the good credit history to get the cards in the first place. The downside of this practice, which I'm sure your son has considered, is that it can damage your credit history simply because you end up with lots of searches showing in a relatively short period of time and some lenders don't like to see that.

Ruby dont go near these schemes with a bargepole,it is a well known saying that you get nothing for notihng,so hidden somewhere there is a catch ,and it may be worse than the debt itself.I have read a lot about debt consolidation,and although I have read the deals I cant unfderstand how it all works,the only thing I can gather is that you put the debt together and then secure it against your home,well if you couldnt make the repayments for any reason ,then what would happen to your home?they wouls come along and repossess it,as simple as that,steer clear everyone,thats my motto for this one

Hi ruby, I was just a member of credit card once and when I quit my job, I stopped it..I really don't know about it! I will be learning here!

Do you mean that he will get another card that will pay off the old one? You can save money that way sometimes if the new one is offering low or no interest on balance transfers, but you have to be diligent about making the payments and paying it down. If you miss a payment or pay it late, they can add all the interest on the balance transfer so there is no savings at all. Also, it's not wise to cancel a credit card as it doesn't look good on your credit, and if you have too many credit cards out it can look bad too, even if you don't have a balance. If he has 6 credit cards but only has a balance on one or two and tries to get a house or a car or something, they can still look at that as 'potential debt (meaning he can use the cards, even if he hasn't done so lately) and deny him credit as being potentially overextended.