One of the main successes in credit cards over the last decade has been the zero per cent balance transfer package, where consumers could stay clear of paying interest on a arrears by transferring it onto a newer credit card that billed no interest charges for a finite period on debt moved onto it.
Not simply was this hugely well-liked by shoppers, who were able to keep from paying interest on what they owed almost indefinitely by diverting the debt owed from card to card, it became a fiercely competitive marketing point for card providers who sought to offer longer and longer deals to entice brand new clients. Unluckily, this scenario couldn't last forever - it was basically costing the card companies a lot of money in lost interest fees, and therefore the appeal of balance transfers started to be restrained by additions like a balance transfer fee, where a fixed percentage of the balance transferred onto the credit card was billed as a handling fee.
At the moment, zero per cent transfers are still out there, but the shrinking quantity of credit card companies means that it's very difficult to find a fresh business to transfer the balance to at a 0% rate. What else could you do if you've still got a hefty balance, and need to pay as little interest as possible? The solution is a life-of-balance transfer promotion.
With these offers, as an alternative to paying 0% for a month or two on your balance, then the total standard APR of the account once the introductory offer has run out, you agree to pay a minimal percentage rate of approximately 5% APR that is set until the balance has been fully repaid. Although you're still having to pay for interest, these specials are far more cost effective than typical borrowing on credit cards, and in most cases are also less costly than other kinds of money like unsecured loans or overdrafts.
Preferably, you'd take the opportunity presented by this minimal percentage rate to concentrate all your financial firepower on paying off the debt as quick as possible, and you definitely shouldn't go shopping with your balance transfer for life card if you want to get the most benefit from the low rate on offer.
Thus, if you have a sizable credit card debt owed and plan to start repaying it in the most cost-effective and economical way possible, a balance transfer for life deal is worthwhile considering.
Article supplied by: Low Rate For Life Transfers