Low rate balance transfers could be better than 0% for some : Credit Card Guide

Low rate balance transfers could be better than 0% for some

According to industry professionals there are many consumers that could fare better with a low rate life of balance transfer credit card rather than a 0% balance transfer card for a specified period.

Balance transfer credit cards have become popular amongst those that want to avoid paying further interest on their credit card balances, as they can transfer the balance to another card and then repay over time without being hit by extortionate interest charges as they would have been on their previous credit card.

There are two types of balance transfer cards, and these are the 0% balance transfer cards, which offer interest free credit on balance transfers for a specified period, which means that the balance must be paid off within the period otherwise interest will start being charged on any remaining balance. There is also the low rate life of balance transfer card, which enables the card holder to enjoy a very low rate of interest for the life of the transferred balance.

Officials from the independent financial advisory company AWD Chase De Vere have stated that there are many consumer who could fare better with a lifetime balance transfer card, as there is not the same pressure to get this paid off within a certain period in order to enjoy the benefits, although cardholder would have to pay a low rate of interest on the transferred balance rather than getting interest free credit.

However, officials also warned that cardholders need to ensure that they do not use the card to make new purchases, as these will be charged at a standard interest rate and not the low interest rate that is being applied to the transferred balance.

Tom Smith
27th August 2007

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