Best Five Cards For Transfers And Purchases!

One devious, hidden trick usually makes it very expensive to use a credit card for both balance transfers and purchases, but we've found five cards that get around this.

One of the biggest hidden dangers of credit cards is something called 'negative payment hierarchy'. This can be very costly if you use your card for more than one purpose.

Let's say you get a credit card with a 0% balance-transfer deal for 9 months. You transfer a balance, but you also make a purchase. Now, when you make a payment to the credit card, it is used to reduce the cheapest debt first. This means that you must first pay off your cheap balance transfer before you can pay off the purchase. All this time you're being charged interest on your purchase, probably at around 16%.

The best way to counter this is to get a credit card with both a 0% balance-transfer deal and a 0% on purchases deal of equal length. This way, you know that you won't be charged interest on either during the length of the deal.

Here are the top five such credit cards on the market:

The top five cards for both balance transfers and purchases

Some of these providers have more than one card with similar deals, but I selected one each to give you more choice of providers.

Although the above deals are for both balance transfers and purchases, the fee is for balance transfers only. Some credit cards charge interest on the fee as if it was a purchase (another dodgy trick), but all the above providers (except Sky, who weren't available) have told me that they don't do this.

I ordered the table by deal length, which puts Halifax at the top with 12 months. However, you should note that Capital One's card, which has a 10-month deal, has a fee that's almost half the size. It might well be worth losing a couple of months if you can pay off your balance over 10 months, in order to pay a smaller fee; for example, you'd save £65 on a £5,000 transfer.

Beware that the fees for any balances you transfer might not appear on your statements for two to three months, so always look at your bills and budget properly to pay it off on time.

Remember: do not use your credit card for cash withdrawals or gambling, and do not use any credit-card cheques you receive. Not only are these very expensive ways to borrow, but you get charged interest immediately, and you'll be paying for it with the aforementioned negative payment hierarchy!

*Actually the fees here are 2.99% and 2.98% respectively, but I think we can safely say these fees are basically 3%...I don't like those .99s or .98s!

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