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Aug 4, 2006
According to an
analyst at moneyfacts.co.uk, a lot of competitive balance transfer deals
continue to enter the market despite rising levels of bad debts in the credit
card industry. As a result, there is a need for cardholders to examine the best
transfer options available.
Market analyst
Andy Britchford says the new breed of lifetime balance transfer deals provide
an alternative payment solution by offering relatively low rates of interest on
any monies transferred until the balance is fully repaid. “This eliminates the
need to regularly change providers, yet provides additional flexibility when
compared to a personal loan with fixed monthly repayments,” he explains.
“The announcement
that American Express would no longer be offering a balance transfer option to
new customers on their credit card range, may have come as bad news for many
consumers, however good news has now arrived with the new lifetime balance
transfer deal on Barclaycard’s Flexi Rate credit card,” Britchford points out.
Although this deal tops the best buy charts by offering 4.9% pa until the
balance is cleared for any balances under £5K, Britchford noted that, as with
many cards, borrowers will be required to pay a balance transfer fee, in this
case 2.50%. “So on a balance of £5K this would cost you £125. However, with
interest rates predicted by some, to rise later this year, it may well be worth
paying the fee in the knowledge that you won’t be charged any more than 4.9%
until your card balance is completely cleared.”
Although balance
transfer fees are now a common feature of many deals, Britchford warns shoppers
to be careful as many are uncapped. As a result, those transferring larger
balances may not enjoy the benefits of the interest free deal.
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