Read about the second-most Foolish credit card, which allows you to make big purchases with money you don't have at no extra cost!
In a minute, I'll tell you about the second-most Foolish credit card.
Firstly, I want to write a bit about debt.There are, I think, two main causes of debt problems.
Firstly, there are the people who make lots of little purchases which they don't track. These expenses gradually build up into a significant debt that leaves the bad budgeter wondering how it happened.These people can't be helped with credit cards. In fact, the wisest thing you could do is get rid of your cards altogether.
The other main cause of avoidable debt is big purchases. Many people can't wait to save up for a holiday or a new car. You want it now, this year. So you borrow money and pay for the big thing.In fact, you want something big every year, but next year you have even less money, because you've been paying interest on your previous borrowings. Hence, when you buy the next big thing you get driven further into debt than last time.You can see how this snowballs.
The Foolish thing for you to do would be to sacrifice the big expense for one year (or longer if necessary), clear the debts, and then start saving. Then, each year, hopefully for the rest of your life, you will be set to pay for things with your savings. You'll be able to afford a lot more over the rest of your life, because you're not constantly paying credit-card interest.I strongly hope that you all save and wait.
However, for those of you who can't wait, there are the second-most Foolish credit cards: 0% on purchases cards.
These are suitable for big purchases, as they allow you to buy things with money you don't have and at no additional cost in interest.The trick is to pay off the whole debt before the 0% deal finishes. This way you pay no interest and your debt slate is clean for the next year.
At present, the top five such cards in the whole market are:
The five top 0% on purchases card
1.Halifax One Credit Card12 months
2.Bank of Scotland One Credit Card12 months
3. HSBC Bank Credit Card12 months
4.Citi Platinum Card11 months
5. Barclaycard Platinum Credit Card 10 months
Here's a warning: with credit cards, the least expensive debt is paid off first, meaning that the more expensive debts continue to accrue more interest for longer.The best way to avoid this con is to never use your credit card for more than one purpose, e.g. don't use it for both balance transfers and purchases. What's more, never use it for cash withdrawals, as it's hugely expensive!
Quiz answers here!Fool stuff to the first ten people (email me) who correctly guessed that the most Foolish credit card is the cashback credit card. If you always pay off your credit-card debts in full each month, you'll want one of those instead.> Compare 0% on purchases cards.> Get 4% Cashback As You Spend> The UK's Cheapest Credit Cards