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Make zero resolutions this year

Credit cards can be a bit weird and confusing, with loads of different options out there. If you use a credit card regularly, then a 0% card might be right up your highway. But how do you know if it’s for you? Pull up a comfortable paisley rug and let me demystify things.

So, what‘s a 0% credit card?

With a 0% purchase credit card you can buy stuff and pay for it later. It’s an enlightened option if you’re meditating on a big purchase such as a car or that holiday you’ve always dreamed of.

You’ll still have to pay the money back – there’s no getting out of that one – but you won’t be charged any interest on what you’ve spent. WARNING GONG: you’ll have to pay the full amount off in a set time, so remember to note when the 0% interest period finishes. If you miss this deadline you’ll start paying interest, big time.

Still think 0% credit cards are right for you? Before you decide, meditate on this:

Protection

Using a credit card has an advantage over debit cards and cash as you have a level of protection on purchases over £100, should they be faulty or arrive late. Under the protection rules you can claim back up to £30,000 if something goes wrong. Handy karma.

Hey, big spender

If you’re known for being a bit swish and splashing out on the odd extravagance, a 0% credit card allows you to pay back your purchases over time. This could be a wise option that allows you to spread the cost of that holiday, car or deluxe elephant.

Can you pay on time?

That’s the big question. Don’t be seduced by the idea of spending loads of money because you don’t have to pay it back straight away. That thought is a naughty temptress, but you still have to pay it all back eventually. Sorry. It’s best to work out how much you can afford to pay back each month before you choose a credit card. Even 0% cards have a minimum monthly payment and if you fail to pay it, you’ll be charged interest. This could be about 20%, so make sure you can make the repayments on time.

What’s the scores on the doors?

While you might see lots of sexy-looking credit card deals, it’s worth remembering that these will only be available to those with the best credit scores. If you have a dodgy score you might not be able to get your hands on the best deals. It's always wise to know your credit score so you know where you stand – visit my Credit Reports section for further wisdom.

There are other options

Still not sure about plumping for a 0% credit card? Fear not, there are alternatives. If you have the spondoolies to afford a big spending spree, it may be better to use a card to earn rewards for those large purchases. If you're going to struggle to pay anything more than the minimum balance each month then it might make sense to choose a personal loan. Rates for personal loans tend to be lower than most credit card rates and borrowing can be made easier with fixed payment over a longer period of time. Read more here.

Peace and loans,

The G.