|
How
would you like the banks to pay you for your business? Well, that’s exactly what
is achievable for two thirds of cardholders who pay their balance in full each
month, with an estimated £8.5 billion windfall for you to share if you are
savvy.
So
how do you get your hands on this money? All it takes is a simple “card trick”!
What
you do is take out a 0% purchase card instead, such as the
Halifax One Online Special or the HSBC Bank Credit Card.
Instead of paying off the amount you owe in full each month, you make only the
minimum monthly payment.
You
then invest the remaining amount, which you would normally have repaid, into a
high interest savings or current account – and reap the rewards.
Let
me give you a simple example.
According to our research, the average UK household spends £1,930 per month on
goods and services, such as transport, recreation, culture, food, drink and
clothing.
With
an average credit limit of £6,000, a typical UK household can spend £1,930 a
month for three months using one of the new 0% purchase cards.
You
then invest the same amount over those three months – a total of £5,790 - in a
6%-plus savings or current account for the rest of the year, continuing to make
minimum repayments towards the card debt over that period.
According to our calculations, you stand to gain £270 gross of tax over a full
year year.
Of
course, it is important to stress that you must always repay at least the
minimum card balance and clear the full amount owed at the end of the offer
period. Thereafter, go back to using your card in the normal way.
What
makes this "card trick" all the more enticing is that there is such a large
selection of 0% purchase cards to choose from on the market – as our
credit card comparison tool, which compares more than 300 UK
credit cards, indicates.
The
market leader is the
Halifax One Online Special which offers 0% on both purchases and
balance transfers for 12 months with a typical APR of 15.9% (3% handling fee).
This is the longest 0% purchase period in the UK, making this card the ideal
companion for your “card trick”.
Other
cards offering 0% for nine months or more on purchases include
Citi’s 0% Purchase Card, SkyCard,
Capital One Platinum,
Barclaycard Purchase Special,
Sainsbury’s Bank Platinum and
MBNA Platinum Rewards.
Once
you have grabbed one of these cards, you will need to take out a high interest
current account or savings account.
You
may already have one. If not, by using the
current
account comparison tool, you could move to one of several current
accounts offering 6% or more in interest, such as the
Alliance & Leicester Premier Direct Current Account which offers
6.5% AER up to £2,500 and has market-leading overdraft terms.
The
Abbey Account offers a headline-stealing rate of 8% AER for customers switching
from other providers – but be wary that this rate drops to 0.1% AER after 12
months.
The
savings account market is also primed for your benefit. There are nearly 20
savings accounts offering rates in excess of 6% including the
Alliance & Leicester DirectSaver at 6.1% AER and the
ICICI HiSAVE account which will be the market-leader again from
this Monday with a rate of 6.3% AER.
Of course taking out
market-leading financial products is a smart move in any circumstances… but with
the incentive of capitalising on an interest windfall, there’s never been a
better time to play your cards right.
LINKS:
Halifax One Online Special – 0% on balance transfers and purchases for 12 months
Alliance & Leicester Premier Direct Current Account – 6.5% AER
Alliance & Leicester DirectSaver - 6.10% AER
ICICI HiSAVE account – 6.30% AER
Compare more than 300 UK credit cards and use our SmartSearch tool
Back to Top
|
