Numerous Instant Approval Credit Cards feature low or 0 interest balance transfer rates to new customers. In this article we will be focussing on the balance transfer credit cards features and what these can do for you – with the added bonus of offering an approval in around 60 seconds.
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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 |
If you’ve seen a low or zero per cent balance transfer credit-based card welcome offer and wondered “what’s the catch” you wouldn’t be the first. While many of us would love to use an offer like this to pay off a credit-based card debt, the fact that the offer seems too good to be true makes us naturally suspicious. It is wise to be wary of offers that appear “too good to be true” however if you read and understand the terms and conditions of the credit-based card, they can be a great way to quickly pay off an outstanding balance that may have otherwise taken years.
Why would a credit card issuer offer a balance transfer at zero per cent?. Quite simply they offer these offers due to the fact introductory or welcome rates in an effort to win over their competitors customers and expand their own customer base. The drive to acquire new customers or customers of their competitors is driven of course by profit.
Since we’ve established the fact that credit card issuers seek new customers in order to profit from interest you may be wondering how they profit by offering 0% p.a. The answer is simple. Credit card providers may well hope that most will use the credit card for new purchases, taking on interest charges at the usual rates be careful, sometimes without interest free days and believe that you will not repay the total balance during the introductory period – meaning that the remainder of the balance will be subject to their stipulated rate of interest.In this way a 0% interest offer, acquires a new customer and has the potential to earn interest on the remainder of the balance transfer and or future purchases.
In the terms and conditions of the application the lender will specify what rate any unpaid amount from the balance transfer will revert to after the balance transfer phase, how easy this information is to find is another matter entirely. From here on this rate will be referred to as the after the honeymoon rate. The after the honeymoon rate will mainly either be the standard variable rate for purchases or the standard variable rate for cash advances. You must check this factor before applying for an instant approval credit-based card and work out how many months it will take to pay out the balance in full; especially if the card reverts to a cash advance rate of interest since this can quickly make any savings you have made insignificant
If you are unlikely to repay your balance in full during a 6 month period (with 0% interest) you may be better advised to look for a longer term ( like 12 months or 15 months) these often carry a slightly higher interest rate like 1.9 or 2.9% per annum.
If you have a substantial unpaid balance that you are unlikely to repay in 12 months consider a life of balance transfer instant approval credit card. In this case the “introductory” low rate will remain in place until your balance transfer has been paid in full.
