Originally published April 20 2005
uSwitch warns credit card users on 0 percent credit card balance transfers
by Mike Adams, the Health Ranger, NaturalNews Editor
A growing number of credit card users are attracted to take advantage of 0 percent credit card balance transfer schemes. It is important though to fully understand the terms and conditions of your chosen credit card company before you decide to take their offer because they may be imposing a balance transfer fee. Further, do not forget that the 0% interest offer has a limit and you may be charged higher interest rates compared to the credit card firm you are with now.
But while consumers are taking advantage of the savings that can be made by managing debts in this way, uSwitch has warned that unless they are careful borrowers could see their schemes for saving money turn into costly mistakes.
Recently a number of credit card providers, including Barclays, have imposed fees on the money people transfer onto cards, something many are still unaware of.
"The balance transfer fee levied by some cards can prove costly to those consumers juggling their debt from card to card," said Nick White, head of personal finance at uSwitch.
"While zero per cent offers are likely to remain, other providers may follow Barclaycard's example by charging fees or become more selective about those customers they allow to transfer balances," he added.
Additionally, many lenders make sure any payments a customer makes are used to pay off the balances with the lowest rate of interest, such as a zero per cent balance transfer, meaning customers continue to be charged interest on more costly debts.
Nationwide is among the lenders that pays off the most expensive part of a customer's balance first, while lenders like Capital One, Virgin, and Egg do not charge a fee to transfer credit card balances to a zero per cent deal.
Perhaps more worryingly, around 40 per cent of people with interest-free balance transfers do not manage to pay off or switch their balance to new cards before the interest-free period ends.
After this period, the consumer is charged interest at a much higher rate," Mr White said.
uSwitch points out to forgetful consumers that there are cards available with a low rate of interest for the lifetime of the balance, such as American Express' 4.9 per cent offer.
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