Get A Low Cost Loan By Using Balance Transfers

By: Joseph Kenny
Submitted: 2007-01-17 16:17:22
Print this article | Tell a friend | For publisher | Social Bookmarking
Rating:
 

Keeping interest payments down is a sign of good money management and credit card tarts have got it down to a fine art. Credit card tarts take advantage of 0% balance transfer deals to make sure they never pay interest on their credit card debt.

Credit Card Tarts

It works like this. The borrower applies for and gets a credit card that offers 0% on balance transfers for a fixed period. Usually this is six months to a year. The borrower transfers the existing debt on to the credit card and makes repayments as usual. Since no interest is being charged, all repayments are reducing the amount of money owed, which is good news for the borrower's long term financial health.

At least six weeks before the 0% deal is due to expire, the borrower applies for another 0% credit card and transfers the remaining balance on to the card. This means the borrower has another period of clearing debt without paying interest. This strategy can be repeated several times, though many credit card companies have got wise to it and are now charging balance transfer fees.

Low Cost Loans

This is a great strategy for people who are trying to reduce debt, but it turns out that it can also be used for debt-free people who want to get a low cost loan. To do this, borrowers need to find two different types of credit cards. Debt free people with a good credit rating should have little problem with this strategy.

First of all, the borrower will need to find a card that offers a low balance transfer rate for the life of the balance. There are several of these to choose from. Many of them also offer other incentives, so it is worth shopping around.

Second, the borrower needs to find a card that allows a fee-free balance transfer, as well as credit card cheques with a 0% interest rate. There are a few cards that meet these criteria.

Transferring The Balance

Third, the borrower needs to do a balance transfer from the low rate card to the 0% card. This means that the 0% card will be in credit. Finally, the borrower can write a credit card cheque from the 0% credit card and pay it into his or her current account. The net effect of this is a loan at a much lower rate than normal bank loans.

Even for people that don't need a loan, this can be a good way of making some cash, especially if they are able to stash the cash in a high interest account.

What About The Credit Rating?

One danger of this strategy is if borrowers make too many credit card applications in a short space of time. This can count against them in a credit file. It is also essential to make at least the minimum payments on the required dates to maintain a good credit history.

Joe Kenny writes for the UK Loans Store where you will find information and reviews of the latest loans and offer more information on secured loans and other loan topics available on site.
Visit Today: www.ukpersonalloanstore.co.uk

Article source: Expert Articles

Most Recent Articles in Finance category

  • Sure Ways to Turn Away a Potential Buyer - By: Nelson Stewart
    So you've listed your home with a reputable agent who has placed internet and newspaper ads. You've just had the first showing and the feedback you received was less than positive. In fact, the people were so turned off, they didn't even complete the tour. There is more to selling a home than marketing. As a seller, there are some very basic things you must never do, or you run the risk of turning away a potential buyer.
  • How to Develop a Budget on a Debt Management Plan - By: Abby Reid
    It isn't easy to carry out a debt management plan or live on a reasonable budget in today's consumer market. Effective advertising and marketing executives work hard to convince the average American citizen that happiness lies in material possessions that only money can buy - fast luxury cars, large homes or cutting-edge electronics. Unfortunately, this is why many people are bogged down with debt and bankruptcy.
  • Short Sales and Your Credit - By: Josh Sloan
    When considering a short sale, be aware of how it affects your credit and your ability to acquire another mortgage down the road. If you intend to buy again, a short sale may mean that you have to wait a shorter time and get a better interest rate than if you go through foreclosure.
  • 'Lease Option' The Most Effective Way to Pull Tenants - By: Jeffery HollyHand
    Finding the ideal occupant can be a difficult job for a landowner but most property-owners are unaware of the fact that the biggest tool to attract tenants has always remained at their disposal. 'Lease Option', a term used for a lease contract in which the lessee is given with the option to buy the property is an effective way to pull tenants towards your estate.
  • Easier Financial Management with Internet Banking - By: Paul McIndoe
    Many people find, for various reasons, that it is often no longer always feasible to perform their banking requirements in their local branch. However, with the developments of internet banking, you needn't miss out when managing your money.
  • Be the Mortgage Lender Through Virgin Money - By: Jerry Clifford
    One way that you may be able to sell your home is by offering the financing yourself. This is not as risky as it sounds, thanks to a new web site that has opened up called 'Virgin Money USA'. Virgin has streamlined a way for ordinary people to arrange loans and it is all explained online in their 'Guide to Seller Mortgages'.
  • Forewarning: A Bank's Best Assets Are Trained Tellers - By: Linda Eagle
    In order to be successful at sales and service, tellers need to be well-trained and encouraged by their Bank.
  • Turn Your Local Eyesore into Eye Candy! - By: Mike Taylor
    If you have an eyesore nearby that may be detracting from the price of your property, your community may qualify for a government grant to clean up and revitalize the area. The U.S. Environmental Protection agency, (EPA) has so far given out millions of dollars in grants to help revitalize unsightly environmental wastes and turn them into local beauty spots or into community assets through the Brownfields Program.
  • Recession inevitable, rates cut or not: economist - By: Paul Sharp
    According to economist's prediction, Australia is facing recession due to several reasons. The main reason is the high debt interest rate. With the high inflation, the interest rate is going up too. That makes family spend most of income to pay for the debt and spend less in retail market. This is the main reason for slump in retail markets and this could lead to a financial crisis.
  • The New Face of Banking: The Well-Trained Teller - By: Linda Eagle
    Banks should invest in Teller Training due to the competition of online banking and compliance risk.