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0% credit cards: Do you read the small print?

Melanie Grant - One Show team | 16:35 UK time, Friday, 10 October 2008

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When is 0% not really 0%? Dom Littlewood knows...he's found out even the best 0% credit card balance transfer offers, can still end up costing you.

You see, although the offer says 0% on balances transferred, 0% doesn't necessarily apply to purchases and cash withdrawls. And if your credit card provider uses a negative order of payment or negative payment hierarchy, then clearing your debts is going to be that much more harder.

To clear your balance as fast as possible, you might be hoping the debt with the highest interest rate is paid off first. But with negative payment hierarchy the debt with the lowest interest rate (i.e 0%) is paid off first - leaving it much harder to clear the most expensive parts of your balance. And some higher rates can be as much as 17%.

Some cards offer positive order of payment where you're paying off the debt charged at the highest interest rate first, before the lower rate. But to be sure you need to either ask or read the small print to find out.

Do you know what repayment hierarchy your credit card is on? Have you read the small print?

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