Introductory interest free instant approval credit cards have been used by consumers to get interest free money over a long period of time since the introductory period to entice new consumers came into existence. The practice of taking advantage of a succession of interest free introductory offers for credit cards is often known as “rate tarting” or “stoozing”. It is indeed possible to take advantage of the credit card offers to maximum effect but it needs a certain amount organisation and discipline is essential.
It is important to understand why banks and other instant approval credit card issuers offer the interest free introductory rates. It is done as a way of increasing market penetration of the credit cards without spending the money on marketing or advertising. Credit card companies spend a large amount of money on advertising their credit cards to the public. After a while a number of banks decided that it may be cheaper and more effective to compete on price, but not over the long term but for a short term basis.
Sometimes a signing on bonuses is paid to new credit card customers, sometimes in the form of money on the card but in many cases in the form of accelerated rewards (such as higher amounts of cash back in the first few months). There were also limited periods of low interest spending on the credit cards. Finally there were low and zero interest balance transfers from one credit card to the new credit card.
Balance transfers are almost all limited with regards to the term of the offer, do not apply to spending on the card (purchases) and are always only applicable to new customers. These restrictions provide guidelines foe how the balance transfer needs to be dealt with.
Careful consideration needs to be made regarding the date to change the credit card. This is not as simple as the last day of the interest free period as processing time is needed to transfer the balance from one credit card to the next and this needs to be taken into account and once a date set it must be adhered to. Discipline is definitely required as there should be no spending (purchases) on the credit cards, as the interest can negate any savings using the card. If necessary a separate card should be taken for the spending.
Cards should be cancelled after the credit cardintroductory period has expiredas these offers are usually only open to new customers and if the card account was closed, after approx 12 months (depending on the credit card issuer) the consumer will be considered a new customer once again.
