The competition is alive and well between
credit card companies, every
company is working hard to invent new and exciting ways of
attracting applicants to apply for a credit card with their
company. No matter where you go, you will likely be given some
sort of offer with any number of credit cards. For example, a
credit card could inform you that they will offer you an unheard
of interest rate with for an extended period, or another could
offer you rewards of cash back on any item you purchase using
their credit card. You will see these types of attractive
advertisements often, you should bear in mind however, that even
though these offers may sound extremely good, typically they do
not offer these things for the consumers interest, instead they
offer them to attract
business.
Debt Consolidation And Credit Consumers often benefit from the fierce competition between
credit card companies. Studies show that the average United Kingdom
resident owes approximately £1,140 in debt with credit cards.
Typically, this is for one or more cards and each card will carry a
unique interest rate. The competition has led companies offering
credit cards to offer a balance transfer at a 0% rate, this is in
hope that they will attract consumers to apply for their credit
card and transfer their existing debt onto theirs.
Many people are switching their credit card balances and reaping the rewards of a better deal. Transferring your balance can be an effective way to reduce your charges. The best credit card deal for you would have a 0% balance transfer rate and a low interest rate. There are many different credit cards to choose from that offer an introductory 0% interest rate. Some may have interest free periods as long as 12 months.
Check Credit Rating You may be wondering, what exactly is a balance transfer? This
is the practice of taking the balance you owe on one card and
transferring it to another. Typically, this is done to help you
save money on the amount of interest you currently pay on the debt.
Now before you run out and apply for that credit card that offers a
0% balance transfer you should be aware that usually that rate is
only a promotional one. You will want to make sure that you
understand what the rate will be once that promotional rate ends,
as well as understand how long you have to pay the payments
interest free.
Intelligent Finance has announced the launch of a new credit card, which offers a low life of balance transfer rate of 4.9% APR.
Improve Credit Rating Another thing you should do, is compare the cards that offer
them, the reason for this is that one card could offer a longer
balance transfer term than another. The ideal card will allow you
enough credit that you will be able to transfer all of your
existing debt to one card. This will allow you to have only one
payment monthly with 0% interest. In essence, you will be able to
pay the debt off at a faster rate because none of the payment is
applied towards interest.
shop around for a credit card that matches your needs, such as one with a low interest rate or cashback Tick Do pay the balance off your credit card before the interest kicks in a or at least, make your minimum repayments on time Tick Do transfer any outstanding balances from your cards to one card that offers a low interest rate on balance transfers Cross
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It also says that ten credit cards had higher balance transfer fees. Samantha Owens, head of personal finance at Moneyfacts, said that rates and fees would "probably not" fall in 2008 although there might be "the odd provider who comes out with a good balance transfer deal". "The credit card market has been offering really good deals and low rates for such a long time, and obviously with the credit crunch coming in, [they have] had to reduce their fees.
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