Balance Transfer Credit Card Offers
Low Interest Rate Credit Cards/
A balance transfer credit card refers to the process whereby
you use a new credit card to pay off/transfer over an existing
credit card or store card debt.
Put simply, if you have one or more high interest credit cards
with an outstanding debt balance, by sourcing a new credit card
with a low interest rate or 0 balance transfer, you can move the
bringing all your credit card debts under one roof, the new low interest rate
or 0 balance transfer credit card offer will
save you significant amounts in interest payments, during the
low/0% balance transfer period. This period is typically 3-6
months, with some credit card companies offering even 0 balance
transfer on credit cards of up to 12 months.
An important feature of balance transfer credit cards is
that when used effectively, they will help you to clear credit card
credit debt quicker, rather than merely servicing the interest
only element of your repayments.
Whether you manage to secure a 3-6 or 12 months 0 balance transfer
on credit card deal or a low rate interest card, the important
thing to remember here is, that the lower the balance transfer
offer, (a 0% balance transfer combined with a fee-free credit
card is best), the bigger the proportion
of your repayments that will go toward reducing your balance.
Under no circumstances should you ever make purchases on a 0%
balance transfer credit card or any other low interest rate
cards, after you have transferred the balance. If you do,
you will incur a high rate of interest and/or charges that will
at the very least wipe out any gains you make on the low rate or
0 interest balance transfer. This is just one of
the various ways a credit card company will profit from your
How Credit Card Companies
Benefit From 0 Balance Transfer Credit Card Deals?
So, what's in it for the credit card companies? They want your
business and especially, if you happen to have a healthy
credit history of making your credit card payments on time.
What better way to lure you than with attractive credit card 0
balance transfer offers.
Credit card companies rely on 0% credit card balance transfer
offers, plus rewards and cashback incentives to
entice you into taking up one of their credit card credit products.
However, as credit card offers go, 0% balance transfer credit
cards will carry a much higher rate of interest if you make
purchases on the card (any where from 15% upwards).
New purchases on 0% credit card balance transfers will therefore
prove more costly to you because the credit card company will
nearly always apply your repayments to clearing off the cheaper
0 interest balance transfer credit card debt first. This leaves any new
purchases debt you acquire, accruing a higher rate of interest
(possibly over the long period of time it takes you to clear the
And note, you will not be able to clear this more expensive portion
of your debt until the cheaper 0 balance transfer credit card credit
debt has been paid.
Balance Transfers on credit cards - Some Facts
Prioritising and discharging the cheaper 0% card balance transfer
over the more expensive 'new purchases debts',
is very profitable for the credit card company and is just one of the
various ways they make their money from you.
In addition to the above, credit card companies bank on your
defaulting in some way in order to profit from you. For example,
late payment fees, higher interest charges and especially where
rewards and incentives schemes/ credit card offers are
involved. Be aware that in general, the cheaper and more enticing
the product or credit card with 0 balance transfer, the more it
will cost you if you do not use it wisely.
Best Credit Card Balance Transfer
0 balance transfers on credit cards are ideal if you have an existing
credit card credit debt or other store cards with outstanding
balances. You should aim to secure the very best 0 balance transfer
credit card deal that offer you a long balance transfer period of
between 3-6-12 months or so. If you can get a fee-free credit
card, all the better.
If you intend to continue spending on credit cards, it is better
to source a separate credit card on which to do so. Some credit
card suppliers do in fact offer 0% interest rate on purchases
for between 3-6 months or even more. However, you will need to
ensure you're in a position to clear the balance in full before
the 0% interest rate period is up, or get charged at a very high
Alternatively, you could opt for a low interest rate credit card.
Do your homework and you will most definately find that there are
even a few credit cards that will offer you a cheap rate deal,
enabling you to do a balance transfer and make purchases all
at the same rate of interest.
Although you are more likely to secure this combination deal on
cheap rate credit cards rather than on 0 balance transfer credit
cards, the two above approaches will nevertheless make
repayments on these types of credit card accounts cheaper.
The content on this site is purely for information purposes only
and is not intended to replace your seeking professional financial
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