Balance Transfer Credit Card Deal
One of the biggest success stories in credit cards over the last decade has been the 0% balance transfer offer, where customers could avoid paying interest on a debt by shifting it onto a new credit card that charged no interest for a limited period on debt transferred onto it.
Not only was this hugely popular among customers, who could avoid paying interest on what they owed almost indefinitely by switching the balance from card to card, it became a hotly contested marketing point for card issuers who sought to offer longer and longer deals to attract new customers. Unfortunately, this situation couldn't last - it was simply costing the card issuers too much money in lost interest, and so the attractiveness of balance transfers began to be limited by additions such as a transfer fee, where a fixed percentage of the debt transferred onto the card was charged as an administration fee.
Today, 0% deals are still around, but the dwindling number of card issuers means that it's hard to find a new company to transfer the balance to at a 0% rate. What can you do if you still have a large balance, and want to pay as little interest as possible? The answer is a lifetime low rate balance transfer.
With these deals, rather than paying 0% for a few months on what you owe, followed by the full standard APR of the card once the introductory period has run out, you agree to pay a low rate of around 5% APR which is fixed until the debt has been fully paid off. Even though you're still having to pay interest, these deals are far cheaper than standard borrowing on credit cards, and in most cases are also cheaper than other types of finance such as personal loans or overdrafts.
Ideally, you'd take the opportunity offered by this low rate to concentrate all your financial firepower on clearing the debt as fast as you can, and you definitely shouldn't make purchases using your lifetime balance transfer card if you want to take full advantage of the low rate on offer.
So, if you have a large credit card balance and want to start repaying it in the most cost-effective and inexpensive way possible, a lifetime deal is well worth considering.
Michael writes on credit cards and related topics, and has written more on life of balance transfer deals at his site.
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