Choosing a Debt-Friendly Credit Card

With this in mind we have put together a checklist to help you control your spending and to possibly stop yourself getting into unnecessary debt.

The only - and golden rule - is always aim to pay off your bill in full each month.

If you do not do this you will find yourself in an ever-increasing spiral of minimum payments and increasing monthly balances, with possibly dreadful consequences.

If you reduce the amount of borrowing on any card you already have, or any that you take out in the future, this will set a limit in your spending.

There are two main options – switch to a cheaper supplier or take out a personal loan.

If your debt is less than £6,000 then opt for cheaper card. If it is greater than this amount then consider a personal loan.

The best of the bunch (at time of writing) is the Virgin credit card.

This one allows the transfer of debts from other cards and pay 0% on them for 16 months. You will pay a one-off charge of 2.98% to transfer these debts. However, a word of caution, you may be barred from Virgin if you have another card with MBNA which runs the Virgin card.

If you miss a minimum payment you will then become liable for 16.6% on all your debts.

Don't use your new card for new purchases after carrying out the balance transfer, as these new transactions will incur interest at the high amount.

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Barclays One-Pulse is better for people who think they can pay off their debt in 14 months as the one-off charge is slightly less at 2.9%.

Barclays Life of Balance is for those who think they will not be able to pay off their balance within a specified time limit. This service allows you to switch your debts to a lower rate of interest until you have paid them off. It allows you to pay 6.5% on debts under £5,000.

If you really need to take out a personal loan, the most competitive is for a loan of £7,000 over a period of four years at a rate of 7.8% for the duration.

Another supplier is Sainsbury’s Personal Loan offering £7,000 for four years at a rate of 8.2%, but beware there is an early redemption clause to this loan.

Should you have to take any of the routes listed above maybe the best solution is to cut up your existing credit cards and pay cash for all purchases.