The summer holidays now seem like the distant past, but for many there’s a stain left from the cost.



If you’ve a holiday debt hangover, or owe money from even further back, the good news is the credit card market is currently a price war-zone. Firms are fighting to give ever longer 0%s and rock bottom fees, so little bit of action could save you £100s or £1,000s.

So here’s my quick briefing to guide you through to maximum savings.

If people have built up debt over the summer, what should they do now?

Sounds obvious, but stop borrowing more and pay off what you have. Crucially, if it’s a credit or store card, pay it off in full, as even if you pay most of it off, but not all, you’ll still pay the month’s interest. Yet if you clear it in full you won’t pay any interest.


What about those who’ve run up credit card debt, but haven’t got the cash to pay it off, what can they do? 


Here the crucial weapon is a 0% balance transfer card. That’s where you get a new card that pays off old card(s) for you, so you owe it but without any interest. This means more of your repayments clear the actual debt, so you get debt-free quicker.
 The Virgin Money Balance Transfer card is the longest 0% deal available, giving 37 months (18.9% APR after) with a one off fee of 2.79%.

Yet actually it’s best to always go for the card with the lowest fee, provided you’re sure you can pay it off within that time.

So if you don’t need that long, go for a card with a shorter 0% deal and a lower fee. The HSBC.co.uk gives 32 months 0% (18.9% APR after) for a 1.4% fee and £25 cashback if you transfer over £100. The Lloydsbank.com Platinum also gives 32 months for a 1.39% fee and Tesco.com is 19 months 0% NO FEE (20.6% APR after).

So just shift the money and you’re quids in - or are there any catches?


The four golden rules if you do this:

1) Don’t apply for cards willy-nilly. Each application goes on your credit file and can have a minor negative impact. To find out which card you’re most likely to get so you can minimise applications, use my free balance transfer eligibility checker at www.mse.me/eligibility or see if the card you’re applying for has a ‘soft search’ tool on its website.


2) Aim to clear the debt or shift again before the 0% ends, or rates rocket.


3) Repay at least the set monthly minimum, or you may lose the 0% rate.


4) Don't spend/withdraw cash on these. It usually isn't at the cheap rate and cash withdrawals hit your credit file.

Can you do balance transfers to other debts such as loans, payday loans or overdrafts?

A few special credit cards let you pay money straight into your bank account from the credit card for a fee. This is called a 'money transfer', and means you have the cheap debt on the credit card and the cash in your bank account to repay expensive debts.
 Virgin Money have a card that lets you do this for 37 months 0% for a 4% fee, and the MBNA.co.uk

Platinum card gives up to 36 months 0% for a 2.99% fee (22.9% APR after), while a VirginMoney.com All Rounder card gives 24 months 0% for a one off 1.9% fee (22.9% APR after). Only do this on one of these specialist cards – other cards will charge a fortune.
 If you’ve got lots of debts, which should you pay off first?

If you’ve multiple cards, overdrafts or loans, don’t just split the amount you repay on various debts.
 List all your debts in order of the interest rate, then focus all your spare cash at clearing the debt with the highest interest rate first, for the simple reason it costs you the most.


Just the minimum repayments on all other lower interest rate debts. Once the most expensive is repaid, shift focus to the next highest rate and continue until debt free. 
 If you’ve only got one card, always try to pay more than the minimum, as you’ll clear the debt far quicker.

What about people who can’t afford to meet even the minimum repayments, or are finding the whole thing very stressful?


I’d define debt crisis as:

• Your non-mortgage debts are more than a year’s after tax income.

• You can’t meet your minimum repayments or basic outgoings.

• You’re not sleeping at night due to debts.

If any of these apply, see a non-profit debt counselling agency for one-on-one help. The techniques they use will take you out of the credit market (not a bad thing for some, but that’s why I say it’s mainly for those in crisis).



This isn’t something to panic about, but it is something to act on soon. No matter how black it feels I’ve NOT ONCE seen an unsolvable debt case. It mightn’t be easy or quick, but it can be done.

The places I’d suggest are Citizensadvice.org.uk (03444 111 444), Stepchange.org (0800 138 1111), or Nationaldebtline.org (0808 808 4000).

They’ll work through your debts with you to devise a solution. Their most common tool is a debt management plan where they negotiate with your creditors to make a set monthly payment. 



For more severe debts, options include debt relief orders, IVAs or bankruptcy, but never try these without advice first. Don’t worry, they’re there to help, not judge.