These days, credit cards in the UK are competing with each other on two very attractive offers with a headline rate of 0%. These 0% credit cards will be either balance transfers; introductory purchases offers or a combination of the two. This article looks at how to get the best out these types of card and the things to that the credit card companies want you to do and therefore the things to avoid. There is a school of thought that believes that these types of card will soon be a thing of the past as they cost the credit card companies too much profit, as consumers get wiser to the pitfalls.
A balance transfer credit card is basically an offer of either a zero interest rate or very low interest rate for a set period. The typical period is 6 months although there are variations on this and there have even been some low rates set for the lifetime of the balance. However, these are becoming rare. Once, the offer period expires then the outstanding balance reverts to the standard rate on purchases. This is very important, as at this point the credit card company will hope the consumer will not take any action and so the company can begin to earn money on the balance.
A 0% purchase offer credit card has many similarities to the balance transfer offers. The introductory rate and period are usually 0% and 6 months in the same way as the balance transfer. Also, once the period expires the outstanding balance is subject to the standard rate on purchases. It is an important point to note that the introductory rate does not apply indefinitely on purchases made in the period, but only applies for the duration of the introductory period.
It is often the case that credit card companies will offer both the balance transfer and 0% on purchases on the same card. When this is not the case it is wise to keep balance transfers and purchases separate. This is because the balance transfer portion of an outstanding balance will be paid off quicker than the standard rate purchases. Therefore an increasing portion of the balance will be subject to the standard rate and the balance transfer portion will decrease at a faster rate. There is nothing to stop a consumer obtaining a credit card with a balance transfer and a separate low interest credit card for any purchases to be made. That way the benefits of the offers are maximised.
In summary the balance transfer and 0% purchase offers can be of great benefit to the consumer provided that the consumer understands how to use the offers to their advantage. A degree of discipline is required in managing repayments. Also, the cardholder should be aware of any penalties that may cause the offer to be cancelled. Armed with this knowledge then these cards can be made to work for the consumer, but remember that when comparing credit cards to pay close attention to the typical APR, which is, always stated where UK credit cards are promoted.
Neil Brown has contributed to many financial sites including Credit Cards UK.
There are three main credit bureaus in the United States;... Read More
Companies that issue credit cards want to make a profit.... Read More
Ah, the sweet rewards of using credit!Not only do you... Read More
1. Buy clothes at thrift stores. BEFORE you buy them,... Read More
If you want to enjoy your life out of spending,... Read More
There are so many credit cards out there to choose... Read More
STUDENT CREDIT CARDS With graduate debt averaging... Read More
In the twenty-first century, there are few documents that have... Read More
Did you apply for a personal loan only to be... Read More
Your credit history is an important aspect of your life.... Read More
There is almost nothing more troublesome than having too much... Read More
In August, 2004, the Federal Trade Commission issued their findings... Read More
The process of clearing credit can be laborious and frustrating,... Read More
As you probably know, interest rates are at all time... Read More
If you intend to apply for a loan, you need... Read More
The all important credit score! It determines the amount of... Read More
Legislators in Washington, D.C. are considering several credit-related consumer protections... Read More
Identity thieves take advantage of everyday opportunities to discover your... Read More
"Erase Bad Debt !""Remove Negative Items From Your Credit Report"You've... Read More
Anywhere you go online nowadays, you will see a multitude... Read More
There are no secrets to repairing your credit. Many shady... Read More
Raising your credit score can be a fairly simple and... Read More
Credit card debts problem is extremely common today. It is... Read More
Mark and Beth, a young married couple in their twenties,... Read More
Credit Cards can bankrupt you if you let them run... Read More
Credit cards are just so convenient, aren't they? There's no... Read More
It may seem like a simple question but its important... Read More
If you're like most people, you probably own at least... Read More
What is Credit? Credit is money granted by a lender... Read More
For those of us who know how to use them... Read More
Ok, let's face it, everybody hates high credit card rates,... Read More
A lot of credit score myths about fico score ratings... Read More
Sure, there are a lot of problems with credit cards,... Read More
Identity theft has become an epidemic. Millions and millions of... Read More
It's no surprise that thousands of Americans are victimized by... Read More
Fact: Over 150 million Americans have credit report with the... Read More
Almost all students have and use student credit cards. Some... Read More
If you are just entering the world of credit cards,... Read More
If you are in danger of credit problems because you... Read More
The average American knows very little about bankruptcy. Most people... Read More
If you've ever applied for a credit card or loan,... Read More
The economic downturn of the last five years has affected... Read More
Ok, let's face it, everybody hates high credit card rates,... Read More
How do these people get my name? If you have... Read More
Joint debts remain joint debts.Both spouses signed a legally binding... Read More
Let's face it, if you are facing the possibilities of... Read More
Have you ever wondered how much money a credit card... Read More
Credit Counseling and bankruptcy are both ways to relieve the... Read More
Here are some useful tips on using credit cards. Whether... Read More
Parents have the full responsibility for their children and their... Read More
Getting your first credit card is a big deal and... Read More
Do you have enormous credit card debt? You are certainly... Read More
The most important thing for you to remember is that... Read More
Did you apply for a personal loan only to be... Read More
It is wise for you to have a company credit... Read More
Years ago your credit score was a big secret, known... Read More
"Cut Your Payments in Half!" the headline screams. "Consolidate Your... Read More
As you probably know, interest rates are at all time... Read More
Not everyone has a positive experience with credit counseling. Potential... Read More
You can stop receiving credit card offers in the mail!... Read More
The Federal Trade Commission (FTC) has set up a new... Read More
Step I - Selecting A Collection AgencySelecting a credit collection... Read More
Like It Or Not, You Have A Score To Settle!... Read More
Your credit file may not reflect all your credit accounts.... Read More
Introduction In this article, a presentation is made of the... Read More
There will come a day when you need credit. You... Read More
Credit |