0% Balance Transfer is the Answer
Year 2005 gave rise to the influx of credit cards that offer 0% balance transfer, otherwise called fee-free balance transfer. In the pursuit of competitiveness, most credit card companies came up with this added feature on top of the other juicy balance transfer promos already existing at the time. However, this feature gave way to higher interest rates on the loan balance. All the consumer need to do is closely check the credit card comparison sites that could be found in the internet and find out which cards offer the best deals.
Normally, balance transfer transactions charge the customer a fee ranging from 2% to 3% of the loan balance aside from the interest rates. Credit cards with 0% balance transfer means that the cardholder, when transferring his balance to another card, will not be charged a fee. A loan balance of £4,500 is clearly a £145 savings against 3% fee credit cards, definitely a fair sum to save. What more for bigger amounts of loan balance.
Some zero balance transfer credit cards are partnered with other features like the 0% interest on balance transfer. This feature would allow the consumer free interest on the loan balance for a certain period of time. This period could be three, five, or six months. A few credit cards offer 0% interest up to one year. However, after the 0% period, an interest charge that is higher than normal is applied on the loan. Therefore, this scheme is ideal for those who intend to fully pay their loans on or before the prescribed period. If the customer however, is diligent enough and would not mind transferring his loan from one card to another now and again, then he could maximize the benefit that could be derived from these features. For instance, if a loan balance is transferred to a card that offers both 0% interest and 0% balance transfer, then after the period stated in the 0% interest, say 6 months, the customer may again transfer the remaining balance of his loan to another card. A card with the same feature that offers the longest 0% interest payment period would be the most ideal to get. If that period expires, he may again transfer said loan. He can do it as many times as he wants, as long as there is a credit card available to approve his application. And we know that there are thousands of credit cards out there.
If the consumer choose to make use of this card hopping strategy on credit card issuers, it is important to make sure that he is always one step ahead in order for him not to be pressed for time. He should be ready with every new application way before the period of paying 0% expires. Applications should not be done at the last minute to prevent interest rate payments.
More important than being prepared though is being meticulous in the choice of credit cards. It is vital to make sure that that the consumer has already scrutinized and exhausted all available credit cards and their corresponding features and have chosen the best ones that would most suit their need.
Tags: 0 Balance Transfer credit cards, 0 Balance Transfers
