Martin Lewis MSE Launches Best Zero Percent Credit Cards and Low Cost Loans | Personal Finances | Finance
Although the finance guru only advocates borrowing money if it is essential, he said that there are currently “cheap” deals available and explained when it is better to go for a loan instead. than a credit card.
When it comes to choosing a credit card or a loan to borrow money, it’s worth listening to the experts.
Typically zero percent credit cards are the best option for people looking to borrow between £ 100 and £ 5,000 according to the country’s favorite money expert, Martin Lewis.
In this week’s Money Saving Expert (MSE) newsletter, he wrote: “Well done, zero percent credit cards offer very cheap borrowing because there is no cost for almost $ 10. two years.
However, he added, “Don’t borrow unless you need to. Make sure it’s a planned purchase, with budgeted and affordable reimbursements. Borrow the minimum necessary and repay as soon as possible.
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MSE added, “The zero percent is only for spending on the card, not for withdrawing money, so avoid that.
“Make sure you plan your repayments to clear the debt before the zero percent ends or goes up to the representative 21 percent APR.
“The best way to do this is to set up a direct debit to pay off a fixed amount like a loan. “
For people looking to borrow between £ 3,000 and £ 25,000, a loan might be better, he explained.
MSE said, “This is your main avenue for larger borrowing. While a card can be useful for replacing a broken refrigerator, a loan is a better option if you need to replace an entire kitchen.
“Unfortunately, there is no way to do it at zero percent. You will be paying interest, so there is a real cost, so think carefully before you embark.
“Although the rates are historically cheap at the moment. “
While there are a number of great deals on the market right now, Martin recommended that people check their eligibility first and reminded them that not everyone gets the rate advertised.
Some of the best loan deals currently available to Brits include Hitachi which offers a 9.8% rate on loans between £ 1,000 and £ 3,000 and Sainsbury’s which charges 3.4% interest on loans between £ 5,000. and £ 7,499.
MSE also mentioned Cahoot and Santander for those looking to borrow over £ 7,500.
And for even larger amounts, MBNA, Tesco and TSB could be worth the detour.
Since not everyone will be accepted for every credit card or loan, it’s best to use a free eligibility checker first that won’t affect someone’s credit score.