Tue 23rd Oct, 2007
Changing credit cards
If you are considering switching from your current credit card provider to a new one because you are having trouble paying back your balance then it would be helpful if you were aware of a few pointers first.
Many credit card companies offer very low interest rates on balance transfers; sometime this can be as low as zero percent. But there is a time limit on this balance transfer. So for example if you need six months to pay off your debt and the zero percent interest on balance transfers apply for the first six months then this is an option worth considering. This could possible save you from having to pay back possibly hundreds in interest fees.
The danger is if you do take that option and you fail to pay back the balance within the given time period the zero percent will revert back to the normal rate of the loan and this includes the lender then charging for interest on the first six months of the loan as well. This could result in repayments outweighing the benefit of the zero interest on the first six months. Banks do have a responsibility to warn you if the introductory offer of zero percent is about to run out. However as a general rule its better not to trust banks if you can help it when it comes the things like this. Just make sure you yourself are always aware of the time limit on your offer or one morning you could wake up to a big surprise.