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Switching your debts between credit cards used to be a simple affair, but the days of transferring your balance from one 0% deal to another could be coming to an end.

Bad debts are causing major problems for credit card providers and as a result, the number of interest-free balance transfers has started to decline.

And it's not just the number of 0% balance transfer cards that has fallen away, there's also been a reduction in the number of longer-term offers, with less and less providers now offering more than a year of interest-free transfer.

With providers reserving their best deals for those with spotless credit records, it's getting increasingly difficult to get accepted for a new interest-free card at all.

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Nonetheless, the balance transfer market is by no means dead, and for those with clean credit histories, there are still a host of 0% deals to be found.

The best on the market is currently the Virgin Money MasterCard which charges 0% on balance transfers for 16 months. Elsewhere, the MBNA Rewards credit card is offering 13 months interest-free, while Egg is offering one year.

Beware the balance transfer fee

An interest-free card may seem a very appealing option if you're struggling to manage your debts, but before applying for a new deal, you do need to think about the balance transfer fee, as these can be as much as 3%. For example, the balance transfer fee on the Virgin card is 2.98%.

Clearing your card

You also need to consider whether you will be able to pay off the balance within the 0% term, as the rates charged at the end of that period can be pretty steep.

Many cards have an annual percentage rate (APR) of more than 15% after the interest-free period expires; the typical APR on the Virgin card, for example, is 16.6%, Egg's is 16.9% and MBNA's is 15.9%.
It may seem odd that credit card rates are still so high even though the Bank of England has kept interest rates at rock bottom, but the recession and rising unemployment are hitting lenders hard and impacting their profit margins.

Perfect credit profile required

Lenders are also operating a far tougher risk policy in the current uncertain climate, and will only accept customers with a squeaky clean credit record. If you are finding it difficult to get accepted for an interest-free balance transfer deal, then don't despair, as there are some simple steps you can take to improve your chances of getting the thumbs up.

• Begin by checking your credit record. Follow the link to get a free Equifax credit report.
• Read through it and check it is both accurate and up-to-date, as errors may prevent you from getting credit; ask for mistakes to be corrected and for "explanatory notes" to be added to explain previous problems.
• If your credit record isn't looking too healthy, you can improve your rating by registering on the electoral roll and ensuring that if you've paid off a County Court Judgement in full that this is shown.
• Cut up any cards you no longer use, and set up a direct debit to ensure you are not missing credit card payments.
• Make sure you can show a consistent history of repaying your mortgage, loans or credit cards on time.

Leave no footprints

Repeatedly applying for credit cards could damage your credit score. This is because multiple applications to several lenders within a short period will show up on your profile, and could affect your ability to get credit in the future.

An easy way to avoid leaving a credit footprint due to unsuccessful credit card applications is by logging on to the new Confused.com credit profiling tool as this will show which card applications are most likely to succeed.
* Rates correct as of 18/09/09

Source: ArticleTrader.com