Amazon recently announced that it will stop accepting Visa credit cards as of Jan. 19, causing a surge in consumers looking online for the best deals on Mastercard alternatives.
The world’s largest online marketplace informed its customers on Wednesday via email that the decision to no longer accept the payment method was due to “Visa’s high fees for processing credit card transactions”. However, customers can still use Visa debit cards to pay for goods after the deadline.
To help people make the best credit card borrowing decisions, finance guru Martin Lewis shared key tips on how to do it “safely, cheaply” – but only if it is an absolute necessity.
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During this week’s episode of the Martin Lewis Money Show Live on STV, he told viewers, “Loans are dirt cheap right now. From banks paying you £ 130 for zero percent overdrafts, to long zero percent cards and the explosion of instant payments later.
“But that could soon change with an upcoming rate hike in the UK. So when you need to borrow money, and only when you need it, my Big Briefing today will tell you how to do it safely and at no cost. “
But he warned, “I want to show you how to do it safely and cheaply, but I don’t want anyone to think that I want to encourage people to borrow.
“You should only do it when you need to.”
Martin Lewis shared how to borrow money safely and cheaply, but only when necessary
(Image: ITV)
He then advised anyone considering applying for a credit card or overdraft to consider three things first.
These are:
- Don’t borrow credit unless you have to – make sure it’s a planned, budgeted, and affordable one-time deal
- Borrow the minimum amount possible
- If you’re not sure, just don’t do it
The founder of MoneySavingExpert.com emphasized that his advice was to borrow for a critical “need”, not just to pay off other debts.
Beware of new borrowing
“For most people, the credit card is the most important zero percent route because they’re interest-free for a decent amount of time,” Martin said.
He told viewers that credit cards are best for borrowing up to £ 5,000 and are regulated.
Section 75 means that if there are problems with a purchase, the dealer is jointly responsible.
“The problems with credit cards that you have to work through are that they can easily be over-spent, repayments are not set – you have to control that – and not everyone is accepted,” said Martin.
Top tips if you can pay by card
Martin highlighted two credit card offers to consider when borrowing for an expensive, one-time purchase, but urged anyone considering it to use an eligibility calculator first.
- Tesco Bank – Offer up to 23 months at 0% plus Clubcard points
- M&S Bank – offers 22 months at 0%
Little known way to access 0% cash
When you need a cash advance that isn’t covered by Section 75 protection, Martin has come up with a smart and secret way to get money quick with a credit card.
He said, “When you need a cash advance, some cards have a little-known technique called a ‘money transfer’.
“Then you get a new card and it pays you money. It transfers money to your bank account for you, so the money is there and you now owe the card zero percent. “
If this is the option that best suits your credit needs, Martin suggested the MBNA credit card, which currently offers up to 18 months at 0%.
However, this comes with a transfer fee of 2.99% of the amount of money you want to transfer to your bank account. For example, if you transfer over € 1,000, you will pay a transfer fee of € 30.
But Martin warned: “Please be careful. Don’t assume that most cards will do this, there is a very limited number of cards that do so so check out these here.
“And always with credit cards, it’s only for a one-time purchase, not for random expenses.”
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If you are struggling to control your expenses, the financial journalist also shared a unique way to control them.
He said, “If you are struggling with self-discipline when you receive the card and use it for what you intend to do, get yourself a bowl of water, put it in the bowl of water, and bring the bowl with it Water in your freezer because you have to smash it before you can use it again. “
His final advice was to treat your credit card like a loan and pay back a fixed amount by direct debit each month before the zero percent offer ends or the interest rate goes up.
For complete information on other credit card borrowing options, visit the MoneySavingExpert.com website here.
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