Balance Transfer Credit Cards
A "Balance transfer" credit card can benefit you if you make balance transfer work for you instead of the other way round! However, don't imagine for a second that I am disparaging or dismissing this "loss leader" approach by credit companies to gaining new customers. Far from it, I am saying it is good for consumers, however, the extent or degree to which you benefit depends very much on how "money smart" you are.
Since balance transfer credit cards are varied in their offers and permutations. A quick look at a website such as http://www.creditcardbank.co.uk/ shows you how much competition there is for your money (sorry debts!) in the credit card market. So how do you go about making websites such as http://www.creditcardbank.co.uk/ and credit cards offering balance transfers work for you? Here is how...
Balance Transfers Credit Cards 101
As you know, balance transfer is when you move the balance from one credit card to a new one offering you an "interest free or holiday period" ranging typically from 6 - 12 months. Clearly, the credit card company offering you an interest free period are betting on the possibility that you will not pay off your outstanding debt before the end of your "interest holiday period". For instance, on the reference website http://www.creditcardbank.co.uk/ you will find many card companies offering 0% APR transfers for anything up to 12 months! So what happens if you pay off your debt during your interest free period? Well, you've guessed it. The debt carried over costs you nothing, zero, zilch; while the card company is left holding the baby!
So, you've guessed it. Credit card companies are taking a gamble. If you pay off your debt before the end of the 0% APR period you win and they lose. However, even if you only paid off a proportion of the debt, you could still save yourself a tidy sum. Though paying off your debt completely during your window of interest free opportunity when no more interest is accrued remains your best strategy.
Of course, if you can"t pay off your balance before the introductory rate expires, you may choose to become a phenomenon known as an "Interest Rate Tart" and move any outstanding debt after your interest free period expires to another card offering a low introductory rate, and so on.
What is clear is that by moving balances from your old cards to a new one with at least a six-month 0% credit card balance transfer or more, you could save up to hundreds or thousands of pounds (or dollars in the case of our American, Canadian & Australian cousins!) over the life of the offer.
So the ball can really be in your court. All you need is a good appetite to play the field as it were. If you wish, this website http://www.creditcardbank.co.uk/acatalog/Compare_Cards__Balance_.html
is as good a place as any to start your "Interest Rate Tarting"!
Good luck and good hunting!