When looking to get a new credit card, there are many things to watch out for. Whether this is a first card or a card to transfer a balance from an older card onto a new one, there are many items to be aware of, including how long the 0% interest offer will be. One of the main issues of transferring a balance is what happens when adding purchases onto the same credit card a balance was transferred onto.

When in the market for a credit card to transfer a high-interest rate balance, there is one particular thing to watch for. For example, a credit card company may claim to have a 0% interest rate for 6 months on a balance transferred from another card. This, in fact, is quite common. However, the catch is simple when explained.

Use this card for any purchases and it’s possible to end up paying an interest rate of approximately 16.9% interest on the purchases. The 0% interest does not apply to any purchases a credit card is normally used for and if there is a transferred balance on the card, as well as purchases, the repayments will go toward paying off the balance transfer first. Therefore, interest will build up on the purchases and there may be no way to repay them unless the balance transfer is paid off first.

Unfortunately, this is why the majority of these companies offer cash backs and rewards. They want people to put purchases and increase the balance. In this particular case, they make a lot more money from the consumer, while individuals spend years trying to pay it off.

Does this mean this is the death of the 0% balance transfer offer? No, it does not. To get around this, it’s important to be aware of the fine print within each particular programme. If the offer states that it is 0% interest on balance transfers, check for how long it will remain 0% and what the interest rate will be once the time is up. It’s also important to know and evaluate what the minimum transfer balance is. Most credit cards are approximately £100. People considering a credit card must decide at this point if the balance will be paid by the time the balance transfer offer period is up and if not, will the interest rate become unmanageable.

The next step is to keep this card only for this balance transfer. Do not put any purchases or draw any cash from this card, no matter what kind of offers are received for rewards or cash back. If this can be done, the 0% balance transfer will be beneficial.

Another thing to watch out for on credit card offers is if there is a handling fee. There are some companies that will charge a one-off 2% fee for balance transfers and they also put a minimum charge of £2 and a maximum of £50. While there are still some offers that will not charge a handling fee, they are becoming rare.

When looking to use a credit card for a balance transfer, it is very important to read the fine print on each and every offer before making a decision. Look at what the interest rate will be and after what time period, as well as any handling fees involved. Evaluate each 0% balance transfer offer and go with the most appropriate choice. Websites such as Creditmarket.co.uk offer a detailed comparison of the key credit card features making the selection process more straightforward.