Cheap credit... if you’re careful

AVERAGE credit card interest is 23 per cent which is bad news for anyone who struggles to pay off their balance in full each month.

But you can take control of mounting card debt – or debts – by switching balances to a zero per cent deal. One of the most eyecatching is from Tesco. Those with a top notch credit record are eligible to pay no interest for up to 33 months. But there is no such thing as a free lunch – you must also pay a fee of 2.69 per cent of the balance. If switching £5,000, that is nearly £135.

Repayment discipline is required. It is vital never to miss the minimum monthly payment or the zero deal is withdrawn. Ideally, divide up the debt into 33 chunks and arrange for that to be paid automatically by direct debit each month.

Also, never make purchases on the card as you pay interest on that spending – 19.9 per cent – although any repayments go to pay off this debt first. If you fail to pay off the debt when the deal ends, the remaining balance will start incurring 19.9 per cent. VERDICT: A great option for those who have a squeaky clean credit record and want to consolidate debts – and have plenty of selfcontrol to pay off the whole sum over the interest free period.

But existing Tesco cardholders are not eligible. Halifax has a 32-month zero per cent card with a 3 per cent transfer fee and three months of interest free spending. Like Tesco, the go-to rate is 19.9 per cent.