Originally published March 9 2005
Alert customers switch between credit cards, personal loans and mortgages to find the best deal
by Mike Adams, the Health Ranger, NaturalNews Editor
'Rate tarts' are credit card customers who shift debt between providers on a regular basis to take advantage of introductory 0% interest rates. These deals caused outstanding unsecured consumer credit to reach £183.6bn in 2004, with credit card debt about a third of that figure. The upside of this trend is that consumers are now better able to access good deals on credit cards, and are taking the initiative to find these rates.
Credit cardsCredit card debt is soaring, and the range of cards on offer is also expanding exponentially.
But card providers are becoming increasingly wary of so-called "rate tarts", who shift their debt frequently between providers to take advantage of introductory "zero per cent" deals.
Unsecured consumer credit outstanding reached £183.6bn in 2004, according to the Bank of England, with credit card debt making up about a third of that figure, or about £59bn.
Websites such as www.uswitch.com or www.moneyfacts.co.uk allow potential customers to compare a wide range of zero per cent offers from credit card providers.
Judging by appearances, lenders are still keen to attract new borrowers this way.
Newman believes that between 50 and 80 per cent of customers either repay their outstanding balance at the end of their introductory zero per cent period or move on to another zero per cent deal on another card and that increasingly savvy customers are willing to switch between different forms of borrowing credit cards, personal loans and mortgages to find the best deal.
He says that providers are also adding "hidden nasties" to their zero per cent deals, such as balance transfer fees, which should make them less appealing to consumers.
Helen Saxon, of the Consumer Credit Counselling Service (CCCS), says that, while zero per cent offers are a great deal for consumers, the ease with which they can sign up to them is a cause for concern.
According to the CCCS, some borrowers have been driven to suicide by unmanageable credit card debt.
Many stressed borrowers, and in particular the committed switchers or "rate tarts", do not actually default on their credit card debt.
Instead they merely make the minimum payment each month.
All content posted on this site is commentary or opinion and is protected under Free Speech. Truth Publishing LLC takes sole responsibility for all content. Truth Publishing sells no hard products and earns no money from the recommendation of products. NaturalNews.com is presented for educational and commentary purposes only and should not be construed as professional advice from any licensed practitioner. Truth Publishing assumes no responsibility for the use or misuse of this material. For the full terms of usage of this material, visit www.NaturalNews.com/terms.shtml