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					Title:
0% Balance Transfer Credit Cards Will Not Last


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522


Summary:
Have you ever been attracted to a credit card because it promises you an outstanding interest rate that seems
just too good to be true? Most of us have at some stage jumped for one of these attractive offers.



Keywords:
credit cards,balance transfers,cash back,advice



Article Body:
Have you ever been attracted to a credit card because it promises you an outstanding interest rate that seems
just too good to be true? Most of us have at some stage jumped for one of these attractive offers. There are a
growing number of credit card providers out there that will offer you 0% deals on either balance transfers or
purchases, and sometimes they just seem too good to resist.


Particularly if you have a large outstanding credit card balance that you are currently paying a lot of interest
on, these offers will be very tempting. In fact, many 0% balance transfer offers will save you hundreds of
pounds on interest that you would otherwise have had to pay on your credit card balance. But no matter how
attractive such offers may appear at the time, you should only ever take on another credit card if you have
taken the time to review your finances and are satisfied that it is the right financial move for you at this time.



To look at a typical example, suppose you have one thousand pounds outstanding on a credit card that
charges 10% APR. This means that over the course of a year, this balance will cost you 100 pounds in
interest charges. Now suppose you find a credit card that offers you 0% on balance transfers for six months.
Well it is pretty obvious that 0% is better than 10 and if you were to take up this offer, assuming there are no
balance transfer fees, then how much will you have saved over the six month interest free period? The
answer is 50 pounds. However, what will the interest rate revert to once the interest free period has come to
an end? This is something you should be thinking about before you opt for the credit card, and not when the
interest free period is about to expire and everything is more urgent. Suppose, for the sake of our example
that the interest rate reverts to a rate of 25%. This means that over the next six months you will pay £125 in
interest.


While this is a very simple example, it illustrates an important point when it comes to 0% balance transfers.
In the example above if the customer had stayed with his 10% card, he would have paid £100 in interest
over a 12 month period. In the same period, by opting for a 0% balance transfer for six months that then
reverted to 25%, he ended up paying £125.


The point to remember is that just because a credit card offers you 0% does not mean it is the best deal out
there. Look at the long term rates that the card will offer you, and compare these to the rates you are already
getting from your credit card. If your existing rate is better than the rates that you will get from the new card
once the introductory offer expires, then maybe you should remain loyal to the card you have.


So while this is going on you will not be spending on the new credit card, but you will be safe in the
knowledge that you are saving the interest payments on the old debt.




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