Most of us have a slightly confused attitude towards credit cards. On the one hand they’re a pretty convenient method of payment and providing you manage the repayments responsibly offer a handy alternative to cash. On the other hand we’re all instinctively wary of the things. Everyone’s heard horror stories of lives consumed by credit card debt and many of us have experienced a, hopefully fleeting, taste of how debt can very quickly spiral out of control with a couple of missed payments and a few ill-advised purchases. “I’ll put it on the plastic” has become a turn of phrase touched with a frisson of danger.

The process of choosing a credit card has thus become, for many, quite important. We all want to know that we’re not getting ripped off and, as far as possible, we’d all like to think that, unlike all the other saps, we’re saving money. In truth of course it’s probably best to forget the idea that there is one credit card that towers over every other and represents the ultimate deal for everyone. No such holy grail exists and in fact there’s really no such thing as a one-size-fits-all credit card. This isn’t to say that there are no good deals out there; it’s just that it’s more a case of choosing the right card for your specific needs. The onus is also on you to manage your credit cards effectively and make them work to your financial advantage.

So the first question is: Do you already have credit card debts? If you do then your priority should be to find a card with a good balance transfer rate – there are plenty out there with a 0% balance transfer offer. When you transfer your credit card balance you are effectively paying off your existing debts on one card using a new card so that you now owe money to the new card. If that new card has a special introductory cheap rate for balance transfers then your previous, more expensive, card will be debt free and you’ll be paying less interest, potentially 0%, on your new card.

It’s now simply a case of chipping away at the debt; if you can pay it off before the introductory cheap rate has expired then you’ve eliminated your debt at no extra cost. Hallelujah!

The most important rule to remember is not to buy anything with your new balance transfer card; if a card offers a genuinely good balance transfer rate then the chances are it won’t offer a similarly attractive purchase rate. If you still want to spend on a credit card then you’d be well advised to get a second card for purchases and focus solely on paying off your balance transfer debts with the first card. If you’re doing this, it’s obviously in your interests to find a card with a good introductory deal on purchases. At the time of writing the HSBC card was offering the longest 0% on purchases deal of 12 months and then a 15.9% typical APR. To keep track of this sort of thing make sure you consult a good comparison site like the Motley Fool. It’s important however that you remember when your 0% period expires; before you start shelling out on an inflated APR you may want to consider switching to another 0% card.

So which card is best for balance transfers? If you’re looking for the longest 0% period then Virgin steams ahead with an impressive 15 month interest free period on balance transfers, they do however charge a relatively high 2.98% fee. Perhaps the best overall deals at the moments are offered by Natwast and RBS who both offer 0% for 13 months and a lower 2% fee. Other decent 0% credit cards worth investigating are offered by Asda Finance(0% PA for 9 months, 2.5% fee), Capital One Platinum (0% PA until 1st August 2008, 1.7% fee) and Mint (0% until 1st Oct 2008 (2.5% fee).

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