0% Credit Cards are a Trap!

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 Just a word of warning.

0% Credit Cards are a Trap!

I'm guilty of using 0% credit cards. It seems like a great idea. But psychologically, you think "wow, got all this free money, what can I spend it on..."

The best use of credit cards, is a credit card you use more like a debit card, and the credit card balance is paid off in full every month (you never pay any interest, and are not building up a mountain of debt.) Don't get into 0% credit cards - you'll have the pain of trying to pay it all back some day.

Here's an example:

  • You get a 0% credit card with a £12k limit.
  • You think, "great, got loads-a-money", and go and blow it on loads of frivolous stuff.
  • It gets to around £10k and you're having to pay £200+ per month minimum payment.
  • Then you get to the point where there's just a year left on the 0% promotion, and start thinking, "shit, I've got to pay off nearly £1000 per month to clear this thing down before I start getting hit by 20% interest!!!"
Note: Generally when these 0% deals finish, it's about 20% annual interest you'll pay, which is £2000 on £10000 debt, or nearly £200 per month just on interest payments. Of course, you can usually transfer to another interest-free credit card but for a free (i.e. a 3.5%  fee on £10k is £350 wasted!)

Moral of the story "0% Credit Cards are a Trap! Avoid debt! Debt free lives matter!"