Introductory Period Lengths

There are a few things you need to keep in mind when it comes to introductory periods. First, you must know that the regular rate of interest, or APR, is going to be once your introductory offer expires.

This is the interest that you’re going to have to start paying on any outstanding balance that’s on that card at that time, as well as any purchases you make in the future. This could be higher than normal to make up for all the money the credit card companies are losing. Some even commit the mistake in thinking that the purchases they make within that introductory period stay at 0% forever, and that only purchases made after the period is over are affected. This is a serious mistake that could cost you a lot of money.

Learn The Golden Rule

The first rule of introductory periods is to pay off your debt by the time the offer ends so that you can start anew once the new rate falls into place. Then, you should be able to pay off your balance each month so that you can keep from paying on that interest. Plus, you will have a good relationship with the credit card.

The 0% interest rate on things you buy should never be looked at as an excuse to go on a shopping spree. You can quickly run up the balance on a credit card in a few months and it can sometimes years to get rid of all that debt you’ve accumulated.

If you are building your debt during your 0% introductory period, and it’s because you’re only paying the minimum payment each month, you must be saving some money for when that introductory period comes to an end. Keep in mind that only paying the minimum amount is not a good thing to do. The only reason why you might want to do this is because you’re a cardholder for the purpose of making a single purchase that’s really necessary, and that you know you’ll be able to pay it off right away.

What is Stoozing?

If you’re smart, you can even make some money with your 0% credit card. This is called stoozing. This is where you buy things on the 0% purchases card and then put the cash you would have spent on the products into a high yielding savings account.

This will earn you interest instead of paying interest. This requires self control if you hope to do this, and you must be sure that you’re able to keep tabs on how much you’re spending and then set the right amount to the side so that you can pay off your debt in full just before the introductory period ends.

Low Interest Credit Cards

Low interest rates help when you make purchases with the card, low balance transfer rates help to save you money whenever you transfer balances from other cards onto your low interest credit card, rewards programs offer things like shopping, travel and other discounts, and one of the many great benefits that’s usually offered with low interest credit cards is security.

Low Interest Rates

Low interest credit cards offer low rates on purchases, but by choosing a low rate card you may miss out on some offers that could benefit you in other ways, such as rewards program points, air miles, and others. These types of rewards benefits can really help when it comes to saving money, and you’re actually getting free things for spending money. If you want these rewards, it might be better to forgo the low interest credit cards and instead decide on a card that offers such rewards.

Try to Get a Better Deal

There are other rates like the balance transfer rates that can also help you make a decision because you get such great rates, sometimes for a long time and sometimes even for life. It’s important to know what you’re going to be charged for the various transactions you may make on the card. When choosing low rate credit cards, it’s important to choose a lender that offers not only low rates for purchases, but also for cash advances, too. Cash advances as well as normal purchase will usually come with different interest rates.

Extras to Consider

The other thing to keep in mind when choosing low interest credit cards is that the rates may change. Most consumers don’t realise that their low interest card is only low because of an introductory offer. Once that introductory period ends, that interest rate is going to revert to a normal rate. Therefore, consumers may end up paying much more once that interest rate jumps to a higher rate.

This means you should always pay attention to the details whenever you apply for low interest credit cards so that you can ensure the card is the right one for you. After all, the credit card you choose is going to be serving your own personal needs as well as your finances. That’s what credit cards are all about.

As long as you know that the interest rate may not stay the same, and that choosing low interest credit cards can lead to missed offers like rewards program, you may now be able to make a better decision on whether or not one of these cards is for you.

Consider annual fee charges and the card issuer as well. You may own this card for many years to come so you should have complete trust in the 0% balance transfer card provider.

0% balance transfers with no transfer fee

Many card providers will charge a fee for 0% balance transfers. Normally a percentage of the balance will be charged and this can range anywhere from 2% to 4% or higher. You will have to do some comparison shopping to find a 0% balance transfer with $0 balance transfer fee.

0% balance transfers with no fee are the type of cards you should be searching for. The idea is to find the best 0% balance transfers in order to save the most money possible.

Annual fee

Another thing you should be watching for when you are doing a comparison between balance transfer cards is the annual fee. Some cards charge $200 or more as a yearly fee, while others have a fee that s much lower. You can find cards that have a $0 fee annually, and some that have an introductory offer of no annual fee for the first year only.

The idea is to shop around when you are looking for 0% balance transfer credit cards. There are a lot of variations in features and benefits from card to card, and you should take careful note of each one as you compare.

Debt relief

All of the fees and charges certainly do add up quickly on credit cards so keep this in mind. You do not want to end up spending as much on these charges as you save by transferring the balance. Only by looking at all of the different factors on the cards will you be able to get the best one that saves you the most amount of money.

There is no reason why you have to carry around a heavy debt on one of your current credit cards when you have the option to get a low interest rate balance transfer card. These cards are designed to give you quick debt relief, and when used wisely, you can get a fresh start and a new beginning with your finances.

It is great to find a 0% balance transfers card with a 0% balance transfer fee. Look for this type of card and make sure that the other charges and fees are not too high and you’ll be sure that you have found a winner.

Rising credit card balances mean that card holders are paying out huge amounts in interest charges over the year, and this is only increasing their debt, and adding to the economic problems.

There is one potential solution available within the credit card market that could help us save money on our credit card debt, and they are the balance transfer credit cards.

These are credit cards that allow you to transfer an outstanding credit card debt to your new card, with the advantage of a special promotional rate of interest from anywhere between 0% and 4% APR.

You do not need to be a mathematician to figure out that with a high credit card balance this could save you huge sums of money, when the average standard rate of interest on credit cards is around 15% APR.

What is the best way to transfer your credit card balance?

This is a question we hear quite often so let’s look at some of the answers. Really the first thing you need to work out is exactly how big your credit card debt is? Once you have that figure worked out then you need to work out how much you can afford to pay off your credit card balance each month.

That should give you an idea of roughly how long it will take you to pay your balance off assuming the balance is not increased. So for example, an outstanding balance of $1000 would be paid off in 10 months if you could afford to pay $100 per month to the credit card debt.

In comparison if you could only afford $50 per month towards the debt the it would take you 20 months to pay off.

There is a good reason why it is so important to know how long it will take you to pay off the debt…

What deal should I go for?

There are different kinds of balance transfer deals available, and when deciding on the best way to transfer your credit card balance, you must take into account the rough time frame in which you plan to pay off the debt.

There are some deals that offer a 0% interest rate, however that rate is temporary, and will often run out within 6 months. Then there are balance for life transfer cards where there is a small rate of interest (2%-6% normally), however this special rate of interest lasts for the whole time you have the outstanding balance.

Balance for life cards will be best for people who work out they will need longer to pay off their balance, whilst 0% deals will be best for people who can pay the debt off in full before the end of the promotional period.

Get on the wrong deal for your situation and it could end up costing you more in the long run!

Other factors

Be sure to look at other features and fees that come with your card to make sure you get the most bang for your buck. It also ensures you do not get hit with any surprise charges or rates somewhere down the line.

Really the best way to transfer your credit card balance is to find a card that suits your personal financial situation. Do your ground work, compare as many deals as possible, and you could find yourself out of debt, and back in pocket sooner rather than later!

Citi has introduced what it calls the Visa Signature program in order to meet the needs of those special customers who like to travel and taste the finer things in life.

With this card they can do travel and have first class experiences by using their rewards and at the best possible rates. A card like this requires a bit of an investment in the form of a hefty annual fee. At $700 a year just to own the card you can expect to get excellent service and benefits, the Citi Select card does not disappoint.

One of the things that high earners enjoy the most is travelling. They want to travel often, travel well, and travel on their own terms. The Citi Select Credit Card is intended to meet all of these desires through its reward program. To begin with cardholders earn points at a rate of two for every dollar that they spend.

They can earn an unlimited number of points and save them up for an unlimited amount of time since they have no expiration date. The points can then be used with any of Citi’s many travel, hotel, and airline partners.

Those customers who prefer it can enrol in the Citi Qantas rewards program and have all of their points automatically deposited in their Qantas Frequent Flyer account. Of course, as you travel you will want to enjoy other luxurious benefits too, like the use of more then 600 VIP airport lounges all over the world. Access to these lounges is available for all cardholders, regardless of what airline they are travelling on or what class their ticket.

Whether you are away from home or right here in Australia you will also gain access to luxury experiences with the Visa Bespoke Event Program. Cardholders can count on getting the very best seats in the house and having each experience tailored to their tastes and desires.

The other exciting reward that is offered from the Citi Select Credit Card is access to preferred rates. Should you need to get a home loan or make a term deposit you will get the best rates available through CitiBank.

In addition, cardholders have access to Citigold financial advisers to help them make important financial choices. With benefits like this, it is easy to see how the Citi Select card is perfect for your luxury lifestyle.

Featured Balance Transfer Card

The HSBC Credit Card has a 0% p.a. for 6 months balance transfer offer, not only that but you will pay no annual fee for life with the card.

• Purchase rate of 16.99% p.a.
• 0% p.a. for 6 months on balance transfers
• $0 annual fee
• 16.99% p.a. on purchases
• Up to 55 days interest free

Apply Now More Info

Click here to read the HSBC Credit Card terms and conditions

These rates make it nearly impossible to actually get out of debt or even make a significant impact on the balance. This is where a balance transfer comes in because it allows you to move your debt to a new card that has a much lower interest rate. These are usually very good deals offered by card companies for a limited period of time. They can be beneficial to your debt repayment strategy as long as you avoid a few common traps.

Traps To Avoid When Transferring A Credit Card Balance

The limited term trap – A lot of people choose their credit card based solely on the interest rate. This is not a good choice when you are transferring a credit card balance. Instead, you should consider how long the introductory rate lasts and pick the one that gives you enough time to clear your debt at the low rate. Even if you wind up spending a small amount in interest it is better then not being able to pay off the debt and having it revert to a standard interest rate, which basically puts you back at square one. It is also important that you make the balance transfer as soon as possible, preferably when you apply for the card as many of these terms begin when your card is activated and not when you actually make the balance transfer.

The missed payment trap – Missing or making late payments on your balance transfer credit card is a huge mistake. As a cardholder you agree to certain terms when you get a new credit card, one of them being that you agree to pay your bill on time each month. If you do not hold up your side of the contract the card issuer can, and often will, rescind the introductory offer and your rate of interest will go up.

The fee trap – As you look at your debt and the options for transferring a credit card balance you will also have to consider the fees that come along with that transfer. If you ignore the fees you might wind up doing a transfer and not actually saving any money, especially if your debt is low. You might also not get the best deal because a very low interest rate card could come with much higher fees then a card that has a slightly higher interest rate.

The purchase trap – Credit card operate under a negative payment hierarchy. This means that all of your payments will go to the debt with the lowest rate of interest first. Therefore, unless your purchase rate is the same as your balance transfer rate it will not be paid on until after your transfer is cleared. This could mean you wind up with a large debt. Instead, use another card for purchases until after your balance transfer is paid in full.

Hidden Charges on Interest Free Credit Cards You Should Know About

Not all of these charges and costs will be exactly ‘hidden fees’, as some of them may be annual account fees or other charges that may apply to your card. Some customers may be prone to overlooking these if their mind is purely focused on the no interest aspect that attracted them to apply for interest free credit cards in the first place.

Uncovering Hidden Fees on Interest Free Credit Cards

While you might be receiving a 0% interest rate on your credit card balance for a given term, you may forget that an annual account fee could apply to your particular account.

To ensure you’re not paying more than you really need to, take time to compare the annual fee charges to other similar credit cards to make sure it’s not higher than it should be.

Another charge that can take cardholders by surprise is the sudden increase in interest rate when the 0% introductory rate expires. Remember, the majority of interest free credit cards only keep this low rate for a short term. When this expires, the interest rate on your outstanding balance will revert to whatever the standard purchase rate is on that card type.

If you withdraw cash from your credit card, you will attract a cash advance fee. You will also be charged interest on the amount withdrawn at the much higher cash advance interest rate from the day you withdrew the money. Even though the facility exists for you to make cash transactions, these are not advised, as you could end up paying far more in fees than you thought you’d be paying.

Additionally, one of the most common hidden fees to catch cardholders by surprise is the levy that could be charged if you miss any of your monthly repayments. Not only are you likely to receive a late payment fee, but you could also find your 0% interest rate will be instantly voided.

If you are thinking of applying for an interest free credit card, be sure to take some time to research the potential fees that could apply to your account in these instances.

You should also make sure that if you are using a 0% interest credit card to help you reduce your debt, work towards repaying as much of your outstanding balance as possible. This way you won’t go back to paying high interest on your credit card debt when the zero interest rate introductory period ends and you’ll be well on your way to becoming debt free.

Save Money With a Balance Transfer

The Suncorp Clear Options Standard will save you money on your current credit card repayments, because if you transfer your current debt to the card you will be charged 1.9% p.a. for 12 months on that amount, plus you will pay a very low annual fee.

• Purchase rate of 12.24% p.a.
• 1.9% p.a. for 12 months on balance transfers
• $39 annual fee
• 12.24% p.a. on purchases
• Up to 0 days interest free

Apply Now More Info

Click here to read the Suncorp Clear Options Standard terms and conditions

You will be going from a higher interest card to a lower interest or 0% interest card and you will have usually from 6 months to a year to pay off your debt.

However, if you find that it takes longer than the specified time, you can try to transfer your balance again to another card. Those in the credit card business call these customers “credit card tarts.” It’s not the most flattering of terms, but who cares if you’re saving money, right?!

“Should Dos” Versus Reality

Everyone knows that you ‘should’ pay your debts immediately. You also ‘should’ live within your means and avoid going into debt. The reality of life is very different, however. We all know that we ‘should’ do these things but most of us get tangled in building up debt and look for ways out.

If you do a balance transfer to a 0% interest card, you are able to avoid paying interest during the time allotted to you. And, if you have a low interest card, you can still avoid paying interest by paying off your balance within the interest-free period. This can be up to 55 days.

What To Look For

If you want to opt for a balance transfer deal, then you should consider these points:

• Look for the longest offer available. This can be up to one year. You will have to make at least the minimum payment during this time to keep the card active and avoid any penalties
• Keep your credit clean. The only way you will be able to obtain a 0% interest card is through strong credit. If you have poor credit, it will appear on your credit report and the card providers will be less than hesitant in issuing to you.
• There are ramifications. When you transfer your balances around and become a “credit card tart”, it does leave negative marks on your credit report. It does have the possibility of lowering your score in the long run if the behaviour is continuous.

Reminders

When you initiate a balance transfer deal you should make a note of when your introductory period ends. Once it gets close, you may want to switch it over to another card if you haven’t paid your balance down already. Use caution when implementing these tips. However, if you use them wisely, you will be able to pay down your debt quickly.

If you have heard of credit card transfers but are not entirely sure how they work, then here our explanation of the transfer process.

Featured Balance Transfer Credit Card

The Suncorp Clear Options Standard card gives you a great balance transfer offer of 1.9% p.a. for 12 months as well as a low purchase rate of 12.24% and a low annual fee of $39.

• Purchase rate of 12.24% p.a.
• 1.9% p.a. for 12 months on balance transfers
• $39 annual fee
• 12.24% p.a. on purchases
• Up to 0 days interest free

Apply Now More Info

Click here to read the Suncorp Clear Options Standard terms and conditions

Credit card transfers explained

When you have an outstanding credit card balance you are charged an interest rate on it each billing period. Interest is normally charged at a percentage of the outstanding balance, and is known as APR= Annual percentage rate.

For example, a card balance of $1000 being charged at an APR of 10% would chalk up $100 of interest charges in a year. In other words the higher your outstanding credit card debt, the more you will have to pay in interest.

When you take into account the fact that interest will then increase your balance, and interest will then be charged at the higher amount (compounding), it is easy to see how many people run into serious credit card debt in a relatively short amount of time.

Balance transfer credit cards offer you the chance to transfer your outstanding balance to a new lender. The way you save money with credit card transfers is that your new lender will be offering you a very low rate of interest for a set period of time.

That same outstanding balance of $1000 that was being charged at 10% APR, may now have a 0% APR for 12 months, meaning you would now save yourself $100 on the debt.

Money saver

With a credit card transfer at 0% you now save money on interest charges, which gives you more money to pay off your overall debt, and will make sure that as long as you do not spend on the new credit card your balance will not increase.

What you have to know is that not all balance transfer cards are made equal, and although there are some 0% deals around, there are also transfer cards that offer a small rate of interest, but for the whole life of the balance.

These credit cards are best suited to people who may take longer to pay off the full outstanding balance.

Get the most from a balance transfer

There are certain rules that you should follow in order to get the most from your balance transfer:

• Do not spend any money with your new credit card
• Pay more than the minimum payment each month
• Be sure of how long the low rate period is for
• Look out for any hidden fees
• Avoid 0% deals if you think it will take you longer to pay off your debt
• Do not withdraw money with your new card

As long as you stick to these rules then credit card transfers can be a very useful debt management tool. Be sure to compare as many deals as you can as lenders are battling for custom, and are creating new improved offers everyday.

Whilst balance transfers in theory are a great way to dig yourself out of a financial hole, there are certain mistakes to avoid when doing a balance transfer.

Common Mistakes to Avoid When Doing a Balance Transfer

Missing the transfer window – When you sign up to a credit card balance transfer deal you are normally given a window of time to make any balance transfers that you wish to. During that time you are able to transfer as many balances as you want, up to the value of your credit limit, or pre-arranged percentage as decided by your lender.

Normally if you miss this window of opportunity you will not be able to do a balance transfer at the same low promotional rate. It is very important for that reason that you make any transfers at the earliest possible opportunity.

Spending money on the balance transfer card – One of the most lethal mistakes to avoid when doing a balance transfer is spending money on your new credit card. What many people do not realise is that the low rate of interest they get only applies to balances transferred to the card, and not to new purchases made on the card.

If you make new purchases with your balance transfer card, unless you also have a low rate on purchases deal, then you will be liable for the card’s standard rate of interest, which will be much higher than the low promotional rate.

The best advice anyone could give you is not to spend anything at all on your balance transfer card, and to use it simply to pay off the debt as soon as possible.

Getting a 0% and not paying it off – Many people are seduced by the 0% rate of many balance transfer cards, but do not realise that the 0% rate is only going to be with them for a short period of time, normally anywhere between 3-6 months.

If they do not pay the balance off in full by the end of the promotional period then the remaining balance will begin to accrue interest at the cards standard rate.

Often a better tactic would be to take a low rate transfer for life card. These cards are similar to the 0% deals except that there is a small interest rate. The interest rate of balance for life cards can be anywhere between 2% and 6%. The difference is that this low rate is fixed and permanent.

No matter how long it takes you to pay off the debt, you will only ever pay that rate of interest. If you think it may take you a bit longer to pay the full balance then a balance for life card will save you more money long term than a 0% card.

On the whole, as long as you remember the mistakes to avoid when doing a balance transfer, in the long run, they can help you save a large sum of money!