Five Top Credit Cards

Here's how to take control of your Christmas credit card debt using balance transfers.

If you splashed out over the Christmas period, you could find yourself saddled with a large debt on your plastic. The New Year has arrived so now is the perfect time to get your finances back into shape which means switching to a 0% balance transfer credit card. That way you can put a temporary stop on your interest while you get to grips with your debt. Voila! And you won't be the only one. The first three months of 2008 are expected to be a frenetic period for the balance transfer market as card holders take control of their Christmas borrowings. According to research from Abbey Credit Cards almost £9 billion worth of debts will be moved to interest-free credit cards over this period with an average amount of £2,666 per transfer. If -- like millions of credit card holders -- you're planning to get in on the act, here's a couple of things you should bear in mind: first, to benefit from a 0% balance transfer credit card you'll normally have to pay a balance transfer fee. For the best 0% cards this will cost you between 2.5% and 3% of your balance but I think that's a relatively small price to pay compared with how much interest you'll save. If you transfer, say, the average balance of £2,666, the fee will be between £66 and £80 -- far less than the interest you would pay on most cards over a year. Second, the interest-free period will be limited, after that time interest will be charged on any remaining balance at the typical APR. That means the interest rate could suddenly be hiked from 0% to around 16% on average, so try your best to redeem your balance in full before the 0% period comes to an end. If you can't do that, it makes sense at that point to transfer the outstanding amount to a new 0% credit card to sidestep interest again. Beat the January Blues Has your January credit card bill given you a nasty shock? If so, the best thing you can do is arrange a balance transfer straightaway. To help you do that as quickly as possible the table below shows the five most competitive 0% balance transfer cards. Fortunately, interest-free periods are getting increasingly generous with some running for more than a year. Better still, the longest interest-free period- available from the Virgin Money Credit Card - now runs for a full 15 months giving you plenty of time to chip away at your balance. Top Five Balance Transfer CardsCard Balance Transfer Rate & Period Balance Transfer Fee Typical APR (variable) Virgin Money Credit Card 0% p.a. for 15 months 3% 15.9% Egg Visa 0% p.a. for 15 months 3% 16.9% Barclaycard Platinum Credit Card 0% p.a. for 14 months 2.5% 14.9% Mint Mastercard 0% p.a. until 1st March 2009 2.9% 12.9% Abbey Credit Card 0% p.a. for 13 months 2.5% 15.9% But remember these cards aren't necessarily the most competitive for new purchases. I've chosen them specifically for balance transfers only. If you're planning to spend on your plastic visit The Motley Fool Credit Card Centre to find the best card for your needs. And take a look at First Class Credit Cards where I've identified the most competitive credit card depending on how you want to use it. Even if you didn't splurge over Christmas, you'll still want to make sure you don't pay over the odds for your card debts. Take a look at the figures below to see how much you could save over a year by switching to a 0% balance transfer card that has an interest-free period of 12 months. Average Opening Balance % APR Monthly Repayment Outstanding Balance After 1 Year Interest Paid Over 1 Year £2,666 16% £100 £1,833 £367 £2,666 0% £100 £1,466 £0 In just one year you could save £367 in interest without even really trying, making a transfer to an interest-free credit card one of the most Foolish things you can do. More: Clean Up Your Credit Cards | Just Eight Balance Transfer Cards Left.