Have you ever been attracted to a credit card because it promises an exceptional interest rate that seems too good to be true? Most of us at some stage jumped for one of these attractive offers. There are a growing number of credit card providers out there that offer 0% deals on balance transfers, whether or purchases, and sometimes just seem too good to resist.
Especially if you have a large outstanding balance on credit cards that you are currently paying a great interest in these offerings will be very tempting. In fact, many offers of 0% balance transfer will save hundreds of pounds in interest that would otherwise have had to pay the balance on your credit card. But no matter how attractive such offers may appear at the time, which should only take another credit card if you have taken the time to review your finances and has proven to be the right choice for you financial at this time.
For a typical example, suppose you have a thousand pounds outstanding on a credit card that charges 10% APR. This means that in the course of a year, this balance will cost 100 pounds in interest expense. Now suppose you find a credit card that offers 0% on balance transfers for six months. Well, it’s pretty obvious that 0% is better than 10 and if you were to accept this offer, assuming no balance transfer fees, then how much have you saved during the period of six months interest free? The answer is 50 pounds. However, what is the interest rate again once the interest free period has ended? This is something we should be thinking about before choosing a credit card, and not when the interest free period is about to expire and all that is most urgent. Suppose for the sake of our example that the interest rate reverts to a rate of 25%. This means that in the next six months you’ll pay £ 125 in interest.
0 Balance Transfer Credit Cards 0% will not last credit card balance transfer no duraráSi While this is a very simple example illustrates an important point when it comes to balance transfers 0%. In the example above, if the client had kept his card of 10% would have paid 100 pounds in interest over a period of 12 months. In the same period, to opt for a balance transfer 0% for six months, then returned to 25%, ended up paying £ 125. Continue Reading