0 Balance Transfers Are Not Always Interest Free Credit Cards

March 19th, 2009 by writer | No Comments | Filed in Press Releases

Most credit card holders are constantly receiving offers in the post to allow them a 0 balance transfer to another credit card issuer. These deals seem great. One can transfer the entire amount owed on one card to a new one and not have to pay any interest on the old balance for almost 15 months. If you qualify these can be great offers. However many people confuse 0 balance transfers with interest free credit cards. These are hardly the same animal. A zero balance transfer lets you move your debt sideways onto a different card. But to do so you will need to pay a premium of a few percent and should you use your card for new purchases the new charges will be subject to a higher rate. Also you must still make a set minimum payment each month or be liable to have the interest rate on your entire balance, both the old and the new raised substantially.

Interest free credit cards are exactly that. These are credit cards that charge no interest whatsoever. You will sometimes have to pay a yearly charge for having the card but if you use your card quite a bit that fee is inconsequential. As with any credit card one must really examine all the details before accepting and using the card. Oddly enough a few card issuers such as Sainsbury’s offer credit cards that are both 0 balance transfer and interest free. To compare all of the best deals on credit cards available in the United Kingdom and worldwide visit Creditchi9ces.co.uk. They are personal finance experts and never charge for their knowledge shared.

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Balance Transfers & Credit Cards – Be Aware Of Hidden Charges

September 18th, 2008 by admin | No Comments | Filed in Press Releases

0 balance transfers
Moving your balance from a credit card that is charging you high interest on your borrowings can possibly save you hundreds of £ in interest payments, but what are the risks?
 
One problem facing would be switchers, is the possibility of a high fee to actually move the balance.
 
Balance transfer fees are now added to many credit cards, even to some 0 balance transfer cards. Often this is in the form of a % of the transferred balance, but sometimes can be a set fee.
 
Some lenders do cap the limit of the fee however.
 

Balance Transfers and Hidden Costs


 
Many people may not realise that with a relatively high percentage of balance transfer offers, a higher rate of interest may be charged on any new purchase, when compared to the low interest, of no interest deal on the balance of the transfer. It may even be in the terms of the offer that you have to clear the transferred sum in full before your repayments start to pay off the (new) purchase balance, which does incur an interest charge.
 
The term used to describe this type of repayment structure is ‘Negative Order of Payments’.
 
Some card providers may not use this model, and may offer a much better deal for would be balance transfer card holders, allowing them both 0% on balance transfers, and also 0% on new purchases.
 
This is just one of the reasons it is very important to compare credit cards before applying.
 
Even with 0 balance transfers and 0% new purchases card as described above, it is well worth making sure you know the exact interest rate once the 0% period has run out… both for the transferred amount, and for new purchases.
 
The reason for this is that many 0 balance transfer or 0% on purchases credit cards have an interest rate that is substantially higher than their standard interest rate, so if you are not careful, you can easily get stung than higher than expected interest.
 
In fact, it is not unknown for 0 balance transfer cards to have interest rates outside the 0% offer that are as high as 16%.
 
If you are a little worried about taking all the above points into consideration, pay a visit to one of the comparison sites, such as http://www.creditchoices.co.uk, where you can find a wealth of articles about related subjects, but also the tools and resources to enable you to compare various offers, and get the deal that suits you the best.
 
 
 
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