Originally published March 26 2005
Shifting debt can be an effective trick for keeping interest rates low
by Mike Adams, the Health Ranger, NaturalNews Editor
Many credit card companies are offering low introductory rates, often as low as no interest for six months, and using this introductory rate wisely can pay dividends. By moving debt from high interest cards to cards with no interest, a person can save a great deal of money. By applying for a new credit card every six months, it can keep interest rates down while not adversely affecting credit rating.
The cheque was from MBNA, Lander�(TM)s credit card provider, and it was offering him £19,000 to spend in any way he chose.
But what was particularly appealing is that MBNA was offering all this money interest-free for six months.
In normal circumstances, Lander, a director at Citywire, the financial information group, would never have dreamt of building up this level of debt on his credit card.
Within days he was the proud owner of £19,000 in premium bonds, all bought courtesy of interest-free money from his credit card company.
For Lander, premium bonds were the obvious answer given their security �" all investments in premium bonds are backed by the Treasury and you can get your money back at any time �" and the fact that all payouts are tax free.
Anyone with typical luck who invests £30,000 in premium bonds can expect to win more than £1,000 a year.
Last month, National Savings and Investments paid out £68.4m to premium bond winners including £1m to one lucky winner and 900,000 separate cheques for £50, its lowest prize amount.
The wide proliferation of interest-free deals on credit cards has encouraged thousands of consumers to put this free money to good use.
Credit card companies offer alluring interest-free borrowing to consumers in a bid to win customers from their rivals.
But growing armies of consumers appear to be using zero per cent borrowing simply to manage their debts better, with many simply switching their debt to a rival credit card when the zero per cent deal expires.
If you do seek to beat credit card companies at their own game, switching between different credit cards should have no adverse effect on your credit rating.
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