New credit card trick to watch out for

When you next apply for a 0% credit card, you might not get the great deal you were expecting.

0% credit cards can be fantastic money management tools but it's easy to get caught out by complicated rules and regulations. Make the wrong move and you can end up paying a raft of fees and charges that you didn't expect. 

And now they're getting even more complicated as 'tiered 0% deals' become more widespread. In other words, you could apply for a table-topping card and find that you're offered the card but the 0% period is shorter than you had expected.

So it's unwelcome news that two of the best credit cards, both from Halifax, have introduced tiered 0% deals. 

How tiered 0% deals work

The first of these cards is the Halifax 20 Month MasterCard. New users get a 20-month 0% period for balance transfers with a 3% fee. Very nice. The only problem is that not all successful applicants will be offered this deal. Instead some applicants will just get an 18-month or 13-month 0% period. 

It's a similar story with the Halifax All in One MasterCard. This comes with a market-leading 15-month 0% deal for new purchases, but this goes down to 13 months or 11 months for some successful applicants. Even these shorter deals are pretty good, however. 

Halifax tells me that half (51%) of successful applicants will definitely get the longest 0% deal. Remember that this is just half of successful applicants, so it's a lot less than half of all applicants once you include those whom Halifax rejects for a credit card altogether. 

The other half of successful applicants (49%) are likely to get one of the other two tiers, although potentially some of them could also get the top deal, says Halifax. 

That's not the unfair bit

This is a great idea for Halifax and it's not unfair by itself. The problem is that you won't know what deal you'll be offered until after you have already impacted your credit record.

That's because it's currently industry-wide practice for card providers to mark your credit report whenever you make an application. Each mark can lower your chances of getting credit, or getting it at a good price. 

Nationwide is an exception that I have identified. It tells me that it offers “soft quotes” as standard on credit cards, which means you should not get a mark on your credit file merely for applying for a card. 

On the plus side, Halifax's new tiered system might potentially increase the number of customers Halifax accepts. It might also mean that Halifax will accept some lower quality customers. However, if your credit profile is excellent you should consider Barclaycard's 22-month deal for a lower fee or, if you want to pay it off faster, Barclaycard's 16-month deal is actually the best value. Read The new top credit card isn't the one you expect for more on why that is. 

As for new purchases, there are other cards offering 15 months on new purchases to all successful applicants. Look to Tesco Bank and M&S Money (which is owned by the HSBC Group). 

Avoid the card tricks

It may be unfair to label Halifax's tiered rates as a 'trick' because, although it may have a negative impact on some people, it's not a bad idea overall and the bank is being open about it. 

That said, I have spotted more than 30 other credit card tricks over the years that the providers like to play on us. Each of these could cost you money, sometimes a lot of money.

You can avoid the majority of them with these five simple rules: 

1. Use a card for just new purchases or balance transfers – but not both.

(That guidance may surprise you if you thought that “negative-payment hierarchy” was completely dead, but read The interest you pay on interest-free credit cards.) Don't use your credit card for cash withdrawals, for buying gift cards and gift vouchers, or for other cash-advance transactions (although a couple of cards on the market do offer a cheap way to withdraw foreign currency).

2. Clear your card completely every month if at all possible

If you can't completely clear it, pay as much as you can to get to the relative safety of a zero or positive balance as soon as possible. At the very least, always pay at least the minimum amount every month without fail. The best way is to set up a direct debit to pay off the full balance, or what you can afford.

3. Always read each statement as soon as it arrives

Check the amount due and the payment due date, which lenders sometimes change with no notice, seemingly to catch you out.

4. Avoid attached insurances, and cards with annual or dormancy fees

5. If you foresee any difficulties in repaying, get in touch with the lender as soon as possible to discuss it

That may sound like it would only help the lender but it really will make it easier for you. Debt advisers at National Debtline, Citizens' Advice or CCCS will be able to discuss how you can best do this. 

More: Compare credit cards through lovemoney.com | Five reasons a balance transfer card isn't good for you | How to spend less and have more