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BaBeeCard is not a credit card but a prepaid debit card that you load up with funds and then spend. No credit checks as no borrowing facility is provided. Aimed primarily at mums and mums to be but anyone is welcome to a BaBeeCard.

The key difference between BaBeeCard and other prepaid cards is users can save money on their everyday family living essentials at high street retailers such as ASDA, Sainsburys’, Argos, Boots, M&S, MotherCare and many more known retailers. There are over 100 retailers to choose from.

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Before you start shopping for a 0% card you need to ask yourself a couple of questions. How big is your debt? And how quickly can you realistically pay it off?

If you don’t have much debt and can thus pay it off quite quickly, you should opt for a fee-free 0% balance-transfer card. These tend to offer shorter interest-free periods but don’t charge you a balance-transfer fee. Martin Lewis of Moneysavingexpert.com suggests the Abbey Zero card, which offers six months at 0% and no fee. To apply call 0800-587 2758, or visit an Abbey branch. If you know it’s going to take longer to pay off, opt for a 0% card with a fee as these tend to offer longer repayment periods. MoneyFacts.co.uk reckons the best available just now is the Virgin Money Credit Card, which offers 0% for 16 months with a 2.98% balance transfer fee. Call 0800-096 9939, or visit uk.virginmoney.com to apply. If you already have a Virgin card, check Moneyfacts.co.uk for other options.

Once you have your card, set up a direct debit to pay off a chunk of the total each month. If you are late with a monthly payment you can put the 0% rate in jeopardy, so make sure you transfer the money in plenty of time each month. And don’t forget the golden rule with 0% credit cards – don’t spend on them. As with most credit cards, you will pay off the money accruing the least interest first. So if you buy anything with your card you’ll be running up interest at the provider’s typical APR on that amount until you have paid off your entire balance transfer amount.

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Credit cards are best to use if you want to borrow a small amount of money for a short time. They are best for people who have the means to pay the money off quickly, and who are good at budgeting. Over a long period of time the APR (annual percentage rate, or interest charge) is generally quite high and therefore you may find yourself paying a lot of interest on the money you have borrowed. Shop around because interest rates vary significantly.
Cards

How they work

If you do not pay off the full amount outstanding at the end of the month, interest will be added daily to the amount left to repay. You have to pay off a minimum amount each month, which is usually 5% of the outstanding balance. Remember to leave enough time for your payment to the credit card company to go through. It normally takes three to five days so be aware that if you miss the payment date, you will be charged interest.You will have a limit to how much you can spend on the card. If this is too little you can apply for an increase. Alternatively some people like to have a low limit to control their spending. If you do want to borrow money over a longer period of time it might be cheaper to arrange a personal loan.

Credit cards can be useful if you want to spread payments for an item. For example you could use the card to buy an expensive piece of furniture and then spread the repayments out over the following few months. This isn’t good value if your credit card has high interest charges (APR), though. Credit cards mean that you do not have to carry cash or a cheque book around and if you purchase goods or services that exceed 100 quid you have some extra consumer protection by using the card.
Added extras

You can withdraw cash using most credit cards, but interest is charged from the day of withdrawal and you may also be charged a small fee, so you should only use this facility in an emergency. Credit cards are also very useful if you are abroad, and allow you to withdraw foreign currency, but you are usually charged a moderate fee for using the card abroad too.
Card in Wallet

Some credit card issuers also offer purchase protection, temporary insurance against damage to your goods or theft, and this is generally free of charge. Payment protection can also be arranged at a cost, which is designed to pay the monthly repayment, if for example you are made redundant, or cannot work due to an accident or sickness
Which card?

* If you’re already in debt, not very organised or good at handling money, or unlikely to travel abroad any time soon, maybe a credit card is not necessary for you. They’re not compulsory, are you sure you need one?
* Most banks or building societies charge you an annual fee for the card as they are lending you money. This fee is generally about 10 to 15 pounds for standard credit cards and sometimes more for a Gold or ‘preferential’ card.
* Some cards have no annual fee, or don’t charge the fee if you spend more than a certain amount with them each year. Some credit cards give you one or two months free credit, so if you are organised and pay off the amount due each month it can be a convenient money source.
* Many cards now have introductory offers, such as 0% charges on your old balance for six months if you transfer to them. This can be a godsend if you think you’ll be able to pay all or most of the money off on that six month period. Beware of being landed with a very high APR at the end of the interest-free period.

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