Tips on using credit carefully when you move

Moving home is expensive. There are conveyancing costs, mortgage fees, removal charges… the list is almost endless.

Couple organising bills in front of laptop

A credit card can be a great ally during a house move, giving you quick access to funds – as long as you use it wisely. 

If you don’t, your debts could quickly spiral out of control and your flexible friend could turn into a costly enemy.

There are three golden rules with credit cards. First, keep a check on your spending. It’s easy to splurge on a credit card but remember that you will eventually have to pay back the money.

The second rule is to pay off more than the monthly minimum when you get your bill. If not, you could be saddled with the debt for years and years.

Rule number three: manage your payments. Card firms charge a high price if you make late payments, miss payments or exceed the credit limit.

There are various different types of credit card, but if you pick the right card, you could save money on your house move. Here’s how.

Pay no interest

You will probably want to spend some money on your new property. Perhaps you need to buy furniture, carpets or curtains.

If so, the trick is to take out a 0% credit card that charges zero interest on purchases for a certain amount of time, which could be as long as 23 months.

A 0% purchase card can work like an interest-free loan, allowing you to spread the cost of a big-ticket item, without putting too much strain on your budget.

A credit card can be a great ally during a house move, giving you quick access to funds...

Let’s say you apply for a card that charges 0% for 12 months and spend £1,200 on furniture. If you clear the debt within the 0% period, you won’t pay a penny in interest.

Of course, if you still owe money when the 0% deal expires, you will start to rack up interest on the debt. So it’s important to spend within your budget and to pay off the money in time.

The best way to make sure you meet the deadline is to set up a direct debit each month. In our example, if you were to arrange a monthly payment of £100, you would be debt-free before the card starts to charge interest.

A 0% card can save you hundreds of pounds in interest. For example, if you spent the £1,200 on a card with a typical interest rate of 19%, you would pay interest of about £230.

Switch your balance

Don’t worry if you have already splurged on a credit card that charges interest, you can simply switch the amount you owe to a credit card that charges zero interest on any transferred balance.

Let’s say you spend £1,200 on a card that charges interest of 19% APR. You can simply switch the debt to a 0% balance transfer card. Again, if you clear the debt before the 0% deal expires, you will pay no interest.

Watch out for fees, though. Balance transfer cards typically charge a fee of 3% of the amount you switch. So, you would pay £36 in our example. Some cards don’t charge fees, but they usually offer a shorter 0% period.

Remember, too, not to buy anything with the card because you will probably pay interest on any purchases.

A number of issuers charge 0% on both balance transfers and purchases, but you can normally secure a better deal if you take out two separate cards.   

It’s also worth bearing in mind that most banks and building societies do not let you switch a balance from a credit card within the same banking group.

So, if you already have a debt on a standard Barclaycard for example, you cannot transfer the money to a 0% Barclaycard deal.

Transfer money

A money transfer card allows you to transfer funds from the card to your current account and can be a useful way to pay off an expensive debt.

Here’s how it works. If you have run up a costly debt while moving house, such as an overdraft or a payday loan, you could take out a 0% money transfer card.

Simply ask the card issuer to transfer appropriate funds into your current account and you can clear the high-interest borrowings.

Just remember that you are not now debt-free. You have simply switched your costly debt for a 0% debt and it’s important to clear your borrowings on the card before the 0% deal expires. If not, you will be charged interest.

There are only a handful of 0% money transfer cards and the longest deal is 36 months. The transfer fees can also be high so remember to take that into account.

Earn cash back

A cash back credit card gives you money every time you spend. The rates vary, but it’s usually between 1% and 3% of your annual spend. So if you spent £1,000 over 12 months you could get £30 back.

A cashback card can be a nice little earner during a house move, but it’s only really worth considering if you can pay off your balance in full each month. If not, the cost of the interest will almost certainly outweigh the benefit of the cash back. Some cash back cards also charge a fee.

Admin essentials

Don’t forget to change the address and any other contact details on your credit cards when you move house. You don’t want your credit card statements to arrive at your old address because they contain sensitive information.

You might also miss your payment deadline and incur a penalty charge.

You can usually update your address by contacting customer services. Or you might be able to complete a change of address form on your statement or amend the details online.

Whether you want a cash back, money transfer, balance transfer or purchase credit card, you can search for the best deals on our website.

Many card providers reserve the best rates for the best customers – in other words, customers with a spotless credit record. But we can tell you if your application is likely to be successful, so you don’t have to fill out countless forms or risk blotting your credit file.

Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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