A Guide to 0% Interest Balance Transfer Credit Cards

Introduction

There are hundreds of different of credit card companies now offering the same old deal: Transfer your existing credit card balances to us and you will not have to pay a penny of interest e.g. 0% interest for 3, 6, 6, 9, 12 months or sometimes even longer. This was and still is a very good deal, however as long as you are aware that after this introductory period you will go onto a higher rate of interest typically from 10% upwards.

Consumer and Market Trends

Many consumers got wise to these introductory offers and just before they were due to begin paying their higher rate of interest would transfer their balance to another credit card which would offer them a similar deal, e.g. 0% APR on balance transfers for another 12 months. While a lot of people do this, a lot of people can?t be bothered with the hassle and just keep their balance where they are and pay the higher interest on the card they have always been with.

Balance Transfer Fees

Over the last 2 to 3 years, the credit card companies have grouped together and tried to come up with ways of preventing consumers from transferring from their credit cards and to remain with them and pay the higher rate of interest after the introductory period. This is typically called the balance transfer fee and can range between 2 and 3%. This means that should you decide to transfer your balance to a new card with a new introductory offer, then you will be charged between 2 and 3% of the amount you wish to transfer. Although this is an additional charge was non existent on the market several years ago, it is still probably well worth paying compared to keeping your balance with your existing credit card company and paying a high interest rate each month.

Conclusion

Also, bear in mind, the introductory rate for any purchases you make on your credit card is normally much shorter, so you will probably pay interest here too, however it all depends how much you spend on purchases and how quickly you pay it off what you have spent on purchases.

The only real way to get credit and pay limited amount of interest would be to take out a card with a descent introductory offer, try to limit how often you use it for purchases and pay it off within the introductory period.

It can be easy to run up debt with a credit card if you just look on it as you would your bank account, however if you try to look on a credit card as you would a loan, then you will find it to be a good value for money financial product.

Graeme Dick is an Editor for Credit Cards 365 further UK Credit Card advice is available.