0% On A Balance Transfers Will Not Last Forever
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The article "0% on a Balance Transfers Will Not Last Forever" talks about credit, it has been released by Peter Kenny.
Have you ever been attracted to a credit card because it promises you an outstanding inetrest rate that seems just too good to be true?
Most of us have at 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 baalnce 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 really 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 that 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, that balance will cost you 100 pounds in inteerst 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 that offer, assuming there are no balance trasnfer 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 beofre 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 reevrts to a rate of 25%.
This means that over the next six months you will pay £125 in interest.While that is a really simple example, it illustrates an important point when it comes to 0% balance transefrs. In the eaxmple 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 hottest deal out there. Look at the long term rates that the card will offer you, and compare tehse 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 that is gonig 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.Peter Kenny is a writer for creditcards-gb
For additional articles and an extensive resource for everything about credit cards, please visit us at http://www.Creditcards-gb.Co.Uk and http://www.Creditcards2go4.Com
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0% on a Balance Transfers Will Not Last Forever
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