The recent proclamation that Virgin is offering a zero percent credit card has yet again brought to our notice the position of our finances.

So what is it offering? Well based on which selection you opt for it gives you 0% on balance transfers for as long as fourteen months and as long as twelve months on any purchases. It certainly looks inviting but is it a viable option. Twelve months is a long time and the concept of not paying out interest for that length of time is definitely inviting. If we now have a lot of Credit Card Debt divided over numerous cards, then transferring them to a single card as a form of Debt Consolidation would undoubtedly be an proposal.

One point we should keep in mind is that though there’s no interest over the term, there’s a fee incurred of 2.98 per cent of any balances which are transferred. Using this Debt Consolidation method we are better equipped to manage our finances. We without doubt have more existing resources to pay off that outstanding debt caused by the lack of interest being charged. As an illustration let’s say we’ve got a £3,500 balance to transfer. It means we save £661 that will have been added as interest over the twelve months. This absolutely looks like a fine Debt Management arrangement does it not?
Without a doubt it gives us a bit of breathing space to get ourselves back on an even keel.

Then again caution should be exercised as like any good deal there may be always a catch. If we don’t pay off that transferred balance in the twelve to fourteen months then interest is going to be charged. With the deal offered by Virgin the yearly rate is a enormous 21.9% on that balance, along with any purchases we have made along the way will then be charged at 18.9%.

So if we really want it to work to our benefit then it is necessary we budget to pay that off before interest starts adding to it. there is a further downside to this great deal. Despite the fact that it will undoubtedly make us feel our Credit Card Debt is improving, we possibly will fall into the trap of spending further, feeling secure with the reassurance that we needn’t have to pay interest on any of it.
Not only have we spent capital that should have been paying off that transferred balance but 12 months down the line we could find ourselves with new debt plus extra interest than before on the initial one.

We then need to scrimp and scrape or look at other 0% deals to transfer to. Not a fine Debt Management practice in the long run. Wouldn’t it be much better to get shot of it whilst we have this excellent deal, or by the very least minimise it to the degree our finances will allow?
So it is a fine deal but only if we are judicious and do not permit enticement to entice us in the moment we have an off day. Just think how thrilling it would be to find yourself in 12 months time either debt free or that much closer than you may have been.

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