Ed Bowsher has a new favourite credit card. Read all about it here.....
This article was first sent to Fools as part of our 'The Good, The Bad and The Ugly' email campaign.
Back in May I wrote about the Halifax All in One Mastercard and I said it was my favourite credit card. I was planning to splurge on a summer holiday and I knew the Halifax card would allow me to pay off the costs of my holiday over a few months without paying any interest.
The Halifax card has done the job for me and it's still a good card. But these days there are better cards out there and it's no longer my favourite card.
My new favourite
My new favourite is the Capital One Platinum Card.
If you have any credit card debt, you could transfer it to this card and not pay any interest on the debt until October 2009 (subject to a 3% fee.)
And if you make any purchases on the card you also won't have to pay any interest on those purchases until October 2009.
Even better, you won't be hit by the nasty trick known as negative payment hierarchy.
Let me explain: With most credit cards, any payments to the card company count against the cheapest debt first. So if you transfer a balance to a card and then spend on the same card, you'll be paying interest on your purchase until you've paid off all of your balance transfer debt.
But that won't happen with the Capital One Platinum Card. You can transfer your balance and happily spend on the card at the same time. That's as long as you can pay off your outstanding debt on the card by October 1st 2009.
Longer balance transfers
True, there are cards that offer longer 0% balance transfer periods than this card.
In particular, there's another card from Capital One, the Capital One Bank Platinum BT & Purchase Mastercard, along with the Barclaycard Platinum with Balance Transfer.
Both of these cards offer 0% balance transfer periods to January 2010 but their 0% purchase periods are shorter.
So if you just want to transfer a balance and then not spend on the card, go for either of these beauties. As long as you don't spend on either card you won't be hit by the dreaded negative payment hierarchy and you'll benefit from a 16-month interest holiday (subject to a fee.)
Let's be realistic
But let's be realistic. Many of us don't want a wallet full of different cards, so just taking out the Capital One Platinum card makes a lot of sense. Then you can use just one card for your debt and your spending.
In fact, the card's only real minus point is that Capital One is only interested in customers with excellent credit records.
But if you have a strong credit record, then you should definitely consider this card. The Capital One Platinum card is now my favourite credit card!
> Compare credit cards via Fool.co.uk
More: Earn Cash As You Splash!