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If you follow the credit greeting card news and financial pundits, you've probably heard how the heyday of the balance transfer charge card is over - or at minimum in its dwindling days. Not therefore, say many credit cards purveyors. Instead, the offers have been refined to cut out a few of the losses the credit card companies were suffering due to them. Of course, loss is a relative thing - when the credit card issuers speak of loss, they mean 'less revenue than expected'. If you haven't had a reason to look at credit card offers in the last few years, then here's a quick recap to bring you right on the issue of the balance transfer charge card and why some financial experts believe that it is dead. A few years back, credit card issuers realized that they'd nearly saturated the marketplace. With statistics showing that the percentage of credit cards issued to adults in the united kingdom is 4: 1 - that's 4 credit cards available for every single adult in the united kingdom - it was clear that many people who could qualify had a minumum of one credit card. That meant that instead of competing with one another to attract the dwindling number of adults who had no charge card yet, they had to compete to attract those that already had credit cards with other companies. The scheme they created to do that was to offer special rates to people who would transfer the balance on their existing charge card to a new credit card using their company. The reasoning was that people would change loyalties when the reward was great enough. If you had been paying 18% interest on a stability of £ 10000, you could may well avoid in the neighborhood of £ 200 annually by moving that balance to a balance transfer charge card with a 0% introductory rate for just one year. The competition between credit credit cards offered big benefits to consumers. Since the advertised rates on each balance transfer charge card dropped, and the introductory periods increased longer and longer, people figure out they could avoid paying interest on their existing account balances - as well as repaying those balances - indefinitely. All they'd to do was transfer the existing balance to some new balance transfer credit card once the introductory rate ran out. That meant they could pay the minimum payment due every month for months on end, without incurring any interest about the account balance - and when the actual introductory period ran out and interest would begin to accrue, simply move the balance on in order to other credit cards and start once again. Of course, that wasn't the way how the credit card UK companies intended balance transfer offers to operate. And to be fair, most consumers used them in the manner that they were intended - to maneuver their account balance to credit cards where they could chip away in the balance and completely wipe it out inside the introductory period. Enough took advantage from the unintended loophole, however, that the credit card issuers have modified their balance transfer offers so they could benefit from them. In a few cases, this has meant shortening the introductory period to just a couple months. Other companies offer a 'life from the balance' introductory rate of just a couple percent - and require that you charge the absolute minimum number or amount of new purchases so that that rate low. Because all payments are put on your balanced transfer first, this implies that you're running up a new balance on which you are accumulating interest in a higher amount for months until your transferred balance is repaid. Is a balance transfer credit card still a great deal? Indeed it is, say many monetary advisors. The trick is to shop carefully for credit cards that offers the best combination of low rate about the balance transfer and low typical price on new purchases. Only use the charge card to make the absolute minimum number or quantity of purchases, and always put as much as possible toward the bill each month in order to wipe out the transferred balance as soon as possible. Once the transferred balance is carried out away with, pay off the brand new charges and retire the card.






Jon Francis may be involved in various areas with the planet of finance and has a keen eye for any bargin! He has an in-depth understanding of the credit card UK market and today helps others get the best from the credit card. To learn more visit moneyeverything. com.

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