Are The Days Of Balance Transfer Credit Cards Over
Balance Transfer Credit CardsAre The Days Of Balance Transfer Credit Cards Over?Tip! Some balance transfer credit cards require initiating balance transfers at the time of application for the card. Yet others allow balance transfers to be completed throughout the duration of the introductory period. If you follow the credit card news and financial pundits, you've probably heard that the heyday of the balance transfer credit card is over - or at least in its dwindling days. Not so, say many credit cards purveyors. Rather, the offers have been refined to cut out some of the losses the credit card companies were suffering because of them. Of course, loss is a relative thing - when the credit card companies speak of loss, they mean 'less profit than expected'. If you haven't had a reason to check out credit card offers over the past few years, then here's a quick recap to bring you up to par on the issue of the balance transfer credit card and why some financial experts believe it is dead. A few years back, credit card companies realized that they'd nearly saturated the market. With statistics showing that the ratio of credit cards issued to adults in the UK is 4:1 - that's 4 credit cards out there for every single adult in the UK - it was clear that most people who could qualify had at least one credit card. That meant that instead of competing with each other to attract the dwindling number of adults who had no credit card yet, they had to compete to attract those that already had a credit card with other companies. The scheme they came up with to do that was to offer special rates to those who would transfer the balance on their existing credit card to a new credit card with their company. The reasoning was that people would change loyalties if the reward was great enough. If you were paying 18% interest on a balance of £10000, you could save yourself in the neighborhood of £200 a year by moving that balance to a balance transfer credit card with a 0% introductory rate for one year. Tip! Introductory rates are meant to be short term incentives, and the long term interest rate will be applied after the introductory period has expired. Persons who use using balance transfer credit cards should strive to pay down their balance as much as possible during the period in which the introductory rate is in effect. The competition between credit cards offered big benefits to consumers. As the advertised rates on each balance transfer credit card dropped, and the introductory periods grew longer and longer, people figure out that they could avoid paying interest on their existing account balances - and even repaying those balances - indefinitely. All they had to do was transfer the existing balance to a new balance transfer credit card when the introductory rate ran out. That meant that they could pay the minimum payment due each month for months on end, without incurring any interest on the account balance - and when the introductory period ran out and interest would start to accrue, simply move the balance on to other credit cards and start all over again. Tip! Bert Wills recommends that you visit CreditCardAssist.com for more advice and free information on how to find out about the best balance transfer credit cards. Of course, that wasn't the way that the credit card UK companies intended balance transfer offers to work. And to be fair, most consumers used them in the way that they were intended - to move their account balance to a credit card where they could chip away at the balance and completely wipe it out within the introductory period. Enough took advantage of the unintended loophole, however, that the credit card companies have modified their balance transfer offers so that they could benefit from them. In some cases, this has meant shortening the introductory period to just a few months. Other companies offer a 'life of the balance' introductory rate of just a few percent - and require that you charge a minimum number or amount of new purchases in order to keep that rate low. Because all payments are applied to your balanced transfer first, this means that you're running up a new account balance on which you are accumulating interest at a higher amount for months until your transferred balance is paid off. Is a balance transfer credit card still a good deal? Indeed it is, say many financial advisors. The trick is to shop carefully for a credit card that offers the best combination of low rate on the balance transfer and low typical rate on new purchases. Only use the credit card to make the absolute minimum number or amount of purchases, and always put as much as you can toward the bill each month to wipe out the transferred balance as quickly as possible. Once the transferred balance is done away with, pay off the new charges and retire the card. Tip! Another perk of balance transfer credit cards that many people fail to consider is the fact that you can consolidate your debt on these cards. Having all of your debt in one place makes it easier to keep track of your finances and make payments.
Get Free Articles From ArticleBuilder.net
|
More ArticlesPrepaid Credit Cards Credit Cards For Bad Credit Leaping Miles With Airline Miles Credit Cards Business Credit Cards Bookkeeping Made Easy Low Interest Credit Cards The Who What Why Where And Ho Loans Mortgages Credit Cards Interest Rate Rises Around T Business Credit Cards Can Make You Money Low Interest Or 0 Apr Credit Cards Take Your Pick Personal Savings Rate And Credit Card Debt In The United Sta
| ||
Related Products And FREE Videos
| |||
| Copyright © 2007, All Rights Reserved | |||