Lifetime Balance Transfer on Credit Cards
Balance transfers have become very popular. This is a method that credit card lenders utilise to generate new business. By offering customers deals such as 0% interest introductory rate for a period usually between three months to one year they are hoping to attract new business. The benefit to you will be in reducing the actual debt only and not paying any interest on the outstanding debt.
Initially when the concept of transfer balances was first started, the customer was invited to transfer his/her balance to a preferential rate with no charges for doing so. However, as the customer became more financially savvy and began transferring outstanding balances as soon as the introductory preferential rate deals expired on to another credit card lender offering another 0% interest rate deal, the credit card lenders began to introduce a balance transfer fee, typically between 2% to 3%.
Therefore every time the customer transferred an outstanding debt to another credit card provider, they would be charged a balance transfer fee. Most credit card companies rely on customer inertia in not seeking better deals when their preferential rate introductory deal expires. They hope to recoup their losses, incurred by charging the customer an artificially low rate, when the customer goes on to their prevailing APR. However, a lot of customers are now much more financially prudent and are looking for a credit card that allows them to transfer their existing balance not for a relatively short term deal but for a lot longer with a low fixed interest rate until their outstanding debt is completely repaid.
Cometh the hour, cometh the credit card - hence the introduction of the lifetime balance transfer. This meets the customer’s need of paying off the debt at the same rate throughout. Instead of having to search for another credit card company offering a 0% interest rate introductory deal every few months. Then you will not be incurring balance transfer fees each time in the bargain. However, some credit card companies may still charge you a fee for the lifetime balance transfer. But his will be offset by the fact that you will not need to incur further balance transfer fees in the future.
As with entering into any new transaction always check the terms and conditions. For example if you were to miss a payment, you might be placed on to the current APR.
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