Credit Card issuers motives for offering instant approval balance transfer credit cards are pretty straight forward. They offer these seemingly “too good to be true” deals to entice customers away from competitors credit cards in favour of their credit cards. The drive to obtain new customers or customers of their competitors is driven of course by profit. This applies to credit cards of all kinds not just instant approval credit cards.
How do credit card issuers profit from such low balance transfer credit cards? Credit Card issuers may hope that you will use the credit card for new purchases, incurring interest charges at the standard rates (be careful, sometimes without interest free days) and that you will not repay the entire balance during the introductory period.
Credit cards with balance transfer offers will specify what rate any outstanding amount from the balance transfer will revert to at the end of the balance transfer period, how easy this information is to find is another matter entirely. This rate is some times referred to as the after the honeymoon rate. The after the honeymoon rate will usually either be the standard variable rate for purchases or the standard variable rate for cash advances. It is important that you check these details and make a real attempt to repay the balance in full during the term of the introductory offer to avoid these interest rates.
If a 6 month term (with 0% interest) is not realistic you may be better advised to look for a longer term ( like 9 months or 12 months) with a slightly higher interest rate.
Best 6 month Instant Balance Transfer – ANZ Low Rate. Best 12 month Instant Balance Transfer – Suncorp Standard
If you have a large outstanding balance that you are unlikely to repay in 12 months consider a life of balance transfer credit card. In this case the “introductory” low rate will remain in place until your balance transfer has been paid in full. Best Life of Balance Transfer – Suncorp Platinum.
Of course it also pays to be organised and disciplined, if you are plaaning on moving your balance transfer from one card to another in succession, remember to close the card account after you are done with the introductory period and have moved the balance on. Many a consumer has tried this and been caught in a balance transfer trap where they have run out of introductory offers as they did not close their old accounts. In this wasy they can not be considered a new customer after a 12 month period to take advantage of the offer once again.
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| ANZ Low Rate Purchases : 0% for 3mths (Offer ends 12.06.12) then 13.39% p.a. Balance Transfer: 0% for 3mths Annual Fee: $58 Interest Free Days: Up to 55 Cash Advance : 21.49% p.a. More Info |
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| ANZ Low Rate Apply Now |
