0% Balance Transfer for Life

One of the reasons why credit card users have difficulty settling their debts is because of the existing high interest rates that they are being charged for. This consumes the bulk of the payments made. As a result, it takes longer to settle the principal amount. 0% Balance Transfer for Life is one of the strategies that credit card companies offer to lure new subscriptions. Some credit card companies offer 0% Balance Transfer for 6 to 12 months. The 0% Balance Transfer for Life obviously has a greater duration, and one can be assured of using it for at least 2 years. The 0% Balance Transfer for Life allows shifting to a new credit account while carrying off the balance from the previous account at a lower interest rate or maybe even zero percent. Because of this, it has been strategically taken by people who wish to reduce interest rates on their debts, and in effect, reduce their debts and clear them as soon as possible. A lot of companies make this offer and consumers usually get the offers through mails. 

High interest rates may be charged with the existing credit card account. Therefore, the payments given by the consumer only go to pay off the interests, and as a result, it takes longer to clear the outstanding balances. With the 0% Balance Transfer for Life, the consumer may open another credit card account with a lower interest and use the savings in that new account to pay off the outstanding balances incurred in the old accounts. As the new account has lower interest rates, it may be faster to clear off the balances. Here, holders can simply payments to decrease their balance rather than pay for the added interest rates. With this strategy, there is a strong possibility of even reducing the amount of debts.  This makes 0% Balance Transfer for Life very attractive. However, there is a catch.

Not all credit card companies offer 0% interest on all purchases along with 0% Balance Transfer for Life. There are credit card companies that would only offer the 0% Balance Transfer for the transferred balances only. This means that any new purchases would be charged on a higher rate. When this happens, the consumer may be shocked to discover that after settling the transferred balance, he is faced with additional charges and perhaps even a higher interest rates. Another thing is that 0% Balance Transfer for Life requires that at least two purchases are to be made monthly. The usual minimum payment required is at 4%. If you have decided to pay the minimum, your payment will be credited first to clear the transferred balance. Hence, if you keep on paying the minimum, you could end up maintaining the 0% interest by making 24 purchases in one year with a different interest rate charge. Lastly, it is typical of 0% interest credit cards to exercise a no tolerance policy over negligence of payments. Late payments may cost the cancellation of credit card issuer-user agreement and the consumer may end up paying the remaining balance with a much higher interest rate.  

There are things consumers should watch out for when being offered with the 0% Balance Transfer for Life. Consumers must make sure that the word ‘free’ literally means 100% free, meaning, no balloon and hidden charges. 0% Balance Transfer is actually not for life. More realistically, it is for two years as the banks may require payment at 4% minimum to be completed within 25 years. The teasers in the labelling of the card may be misleading. Hence, it is always important to read the bank’s terms and conditions of use carefully.