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Moving Debt Between Cards Can Save You Money.
If you’re like most people, you have plenty
of credit cards, and you have stacks of offers for
more. The credit card industry is so competitive
that, whatever card you have, the chances are that
somewhere out there is one that would be cheaper
or better for you – and you can change as
often as you want!
Take Up Teaser Offers.
To try and get customers, credit cards are still
offering massive discount rates when you transfer
balances over to them. These ‘teaser’
rates will only last for a set period (check the
terms and conditions), but they can still save you
a lot of money – especially if you switch
to another card’s teaser rate each time one
ends.
Yes, this does mean applying for a new card relatively
often – but if you do it online, you’ll
find it’s quite painless. Is it really worth
hundreds of dollars to save the trouble of applying
for a new card?
Extend Your Offers.
You might not even need to move to another card
to get a teaser offer for longer. If you phone and
ask, many lenders will extend the preferential rate
for longer, in an effort to get you to stick around.
Check the Small Print.
You might find that the ‘low, low rate’
only lasts a few months, and you might also find
that it only applies to balance transfers, not new
purchases. A common trap is for a card to allow
you to transfer your balance of thousands at 0%
APR, only to charge you 20% or more on anything
new you buy with it. Of course, as soon as you ditch
that card and move to the next, the new purchases
become a balance transfer again.
A more nasty thing you might find is that you’re
signing up to a minimum term to get the teaser offer
– they won’t let you transfer your balance
away again for a year, or even more. Avoid these
cards like the plague.
Keep Track of Time.
Your card issuer isn’t going to go out of
their way to alert you when your teaser rate is
over. Make sure you keep track: make a mark on the
calendar. Months can go by far more quickly than
you’d think, and missing the end of the teaser
period by even a day will mean that you’ll
end up paying interest at the normal rate.
Moving Around and Your Credit Rating.
Moving debt around between cards often affects
your credit rating in an odd way. On the one hand,
it shows that you could be an unprofitable customer
– after all, you change cards before they
can make a profit from you. On the other hand, it
also shows that you’re likely to take up offers
that you’re sent, and companies tend to believe
that they have a great strategy to keep you with
them where others have failed.
In other words, some companies will hate you for
it, and some will love you. Bear in mind, though,
that the longer you do it for, the fewer companies
will want to send you their very best teaser rates.
Credit Card Resources
Unsecured Credit Cards for bad credit
Reward Credit Cards (good credit required)
Guaranteed Approval Pre-paid Credit Cards
Payday Loan Companies
Secured Credit Cards
About the Author
Liz Roberts is a loan consultant with NewHorizon
Finance and has been providing consumers
and business owners with financing since 1989.
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