A number of Instant Approval Credit Cards provide low or 0 interest balance transfer rates to new customers
. It is the balance transfer aspect of these cards that is the key subject of this article.
Have you looked into using a balance transfer credit card to pay off an unsettled debt but been concerned about the small print? . Unquestionably it is normal to feel this way, for the reason that if something seems too good to be true it frequently is. It is wise to be wary of offers that appear "too good to be true" however if you read and understand the terms and conditions of the credit-based card, they can be a great way to quickly pay off an outstanding balance that may have otherwise taken years.
Why would a credit card issuer offer a balance transfer at zero per cent?. Quite simply they offer these programs because introductory or welcome rates in an effort to win over their competitors customers and expand their own customer base. The drive to find new customers or customers of their competitors is driven of course by profit.
How do credit card issuers profit from 0% p.a. balance transfer credit cards? The answer is simple. Credit card providers may trust that most people will continue use the credit card for new purchases, accruing interest charges at the usual rates be careful, sometimes without interest free days and anticipate that you won't repay the existing balance over the introductory period - meaning that the rest of the balance will be subject to their stipulated rate of interest.So the short-term loss with an introductory offer of 0% interest is often a long term gain.
Balance transfer credit card offers will state what rate any overdue amount from the balance transfer will revert to at the end of the balance transfer term. I call this rate the after the honeymoon rate. The after the honeymoon rate will consistently either be the standard variable rate for purchases or the standard variable rate for cash-advances. Have a good idea of how many months it will take to pay off all or at least most of your outstanding balance and find a credit card with a similar introductory period before you apply.
Do a budget and be brutally honest with yourself. Is 6 months at 0% long enough to pay off your debt in full or would you better off with 1.9% offer over 12 months or even a 2.9% offer over 15 or 18 months?
If you have a significant unpaid balance that you are unlikely to repay in 12 months consider a life of balance transfer instant approval credit-based card. In this case the "introductory" low rate will remain in place until your balance transfer has been paid in full.