Credit card companies vie for balance transfers
San Francisco, CA -- (SBWIRE) -- 11/09/2012 -- With credit card companies engaged in an interest rate battle, some offering as low as 0%, now is the time for those with excellent credit to transfer their balances.
“I’d have expected this market to get going just after Christmas, but it’s started up now,” said Andrew Hagger of Moneycomms.co.uk.
According to Hagger, the low interest cards currently on offer are typically either 0% for up to 23 months with a relatively high balance transfer fee, or a briefer interest-free period with a significantly cheaper balance transfer fee.
"Just this week three top-value credit cards have come on the market,” he continued. “Providers have realised that not everybody switching a balance is looking for a 20-month-plus term to repay the debt, some people are looking to repay inside 12 months, but at the lowest cost.”
Here are some of the deals currently available:
- NatWest is offering 0% for 13 months on transfers and for six months on purchases with a 1% balance transfer fee.
- MBNA is offering 0% for 14 months and a balance transfer fee of 1.25%.
-Barclaycard Platinum is offering 0% interest for 23 months on balance transfers with a 2.8% transfer fee, as well as 0% on purchases made during the first three months.
With offers such as these, some consumers will no doubt use their current credit cards to purchase holiday gifts, particularly larger purchases, and then transfer the balances to a 0% card.
Credit card companies make such seemingly generous offers based on the likelihood of a certain percentage of people failing to pay off the balance before the end of the 0% term.
Those who miss even one minimum payment will forego their 0% deal and begin accruing interest at a more conventional rate, which is often 18%.
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