| |
| |
|
Credit Information |
|
|
|
Rate Tarts Losing Ability to Cherry Pick
A "rate tart" is someone who switches from one zero per cent introductory credit card deal to another to avoid paying interest; however they may be set to become something of the past. Recently a number of the major credit card companies, including Egg, Barclays, the Royal Bank of Scotland and MBNA have introduced transfer charges for people who want to shift their outstanding credit card balances to a new card to take advantage of a zero per cent introductory rate. Rate tarts will wait until the interest free period is about to expire on their current credit card, and then check through lists of providers to find another card they can switch to that has another 0% interest rate introductory period. The growth of financial comparison sites like uSwitch, Moneynet and Moneyfacts has made this money saving behaviour easy to achieve. The providers have effectively become victims of their own success. As more and more card companies began offering interest-free balance transfers, the card providers found that they had to offer longer and longer interest-free periods to win customers, which in turn meant less profit. Analysts have recently estimated that rate tarts are currently costing lenders £1 billion a year. Financial director Stuart Glendenning said, "Charging a fee on balance transfers is one way of recouping some losses, given it is impossible to make money lending at 0 per cent if the customer conducts no further transactions on the card." Professor Merlin Stone of Bristol Business School, comments: "Economically, some providers cannot sustain their current offers of zero per cent interest which means they may have to remove them or start introducing new charges to help reduce their losses." This is exactly what appears to be happening, Professor Stone stated, "Research shows that in 2003, none of the cards offering zero per cent APR interest on balance transfers applied charges for transferring balances compared to around 11 per cent that do today." Perhaps in an effort to justify the reduction in 0% introductory period on credit cards, Patrick Muir, marketing director at Morgan Stanley Consumer Banking, said: "Our research suggests that cardholders are wising up to short-term deals, as the majority of those currently switching or planning to switch are not moving from one short-term offer to another." Only eight per cent of people are looking to change their credit card in the coming months, said investment bank Morgan Stanley, however Stuart Glendenning advises, "Whilst not all have gone down the fee route yet, my advice is simple: transfer your balance for free while you still can." Richard works in Edinburgh for bigmouthmedia, as well as writing for the personal finance blog Cashzilla http://cashzilla.blogspot.com/, and drinking too much coffee. http://www.bigmouthmedia.com
bigmouthmedia head office:
MORE RESOURCES:
Credit - Google News |
|
|
|
RELATED ARTICLES
Preventing Credit Card Mess Credit card debts problem is extremely common today. It is usually the first sign of longer term financial troubles. Credit Scores and Loan Applications Keep Your Credit History Clean - Remove A Negative Credit Record From Your Credit ReportIt can make a difference of up to 18% in loan repayment costs. For example, on a 30-year, $150,000 fixed rate mortgage, a borrower with the best credit score, 760-850, will pay 5. Building Good Business Credit After Bad Credit Can you establish good business credit if you have bad personal credit? The answer is yes.. Credit Repair Services vs. Do-It-Yourself Credit Repair Millions of Americans suffer because of bad credit these days, and almost all of these people turn to the Internet for help. In the past 5 years hundreds of 'internet-based' credit repair services have sprung up, preying on consumers in need of real help. The Hitchhiker's Guide To Insanity A new sickness is plaguing the UK called Denial. Denial has resulted in a national personal debt of almost £1. Identity Theft - Dont Think You Are Immune As identity theft becomes more prevalent, the need to regularly check your credit report is very easy to see and understand. Two big headlines in the news recently point to how closely tied your credit report and identity theft are. Credit Score - Reporting Your Financial Health Credit score is one of the most basic, determining factor while loan borrowing. Credit score is the criterion for the creditor to ascertain whether to give you credit or not. Dont Dig Your Own Pit If you want to enjoy your life out of spending, enjoy if you have your own resources and money.But don't enjoy your life by becoming a debtor to somebody. Repairing Your Credit Score and Clearing Derogatory Marks on Your Credit Report Raising your credit score can be a fairly simple and straightforward process unless you have derogatory marks that need to be disputed (which will be explained below).The reasons for bad credit can be as follows, high balances, bankruptcies, late payments, and many others. 5 Things Your Credit Card Company Keeps Quiet About Credit Cards can bankrupt you if you let them run away from you. The various Credit Cards companies are in it for profit so they will not generally alert you to things you can do to save yourself money. The FICO Score Misconceptions There are many misconceptions about credit scores out there. There are borrowers who believe that they don't have a credit score. Maximizing Credit Card Rewards In their quest to get you to sign up for their credit card, banks and financial institutions are coming up with more and higher incentives to entice you. Frequent flyer miles gave way to gas miles which opened the door for cash rebates and reward points to be used at 'our fine member merchants'. Common Credit Score Myths A lot of credit score myths about fico score ratings get spread around and some of them are just outdated information. Sometimes even lenders can give you the wrong advice and it can get confusing. Bounced Checks - Straight Talk On Dealing With Bad Checks (NSF) A check can be considered bad if it is bogus or the NSF checks (non sufficient funds check), also referred as bounced check.The issuance of a NSF or bad checks is an unlawful act and can attract civil and criminal penalties. Is Plastic Making You Happier? If you're like most people, you probably own at least one.And like most people, you've maybe never thought what it's really costing you?At a recent conference held by the Fabian Society at London's Imperial college, one of the issues discussed was happiness, and, more specifically, why it seems to elude so many of us. Credit and Banking Money Saving Services The first rule when applying for banking and credit services is to always read the fine print and to understand all of it. Read up, take it home, and analyze it, ask the banking manager questions. Dealing With A Collection Agency Step I - Selecting A Collection AgencySelecting a credit collection agency is perhaps the most important and difficult task. Some factors you must consider while selecting a collection agency are:- Experience and professionals - Geographical presence - Expertise - Fees and charging model - Customer references - Collection Agency Services has covered this topic in depth through various free collections reports and articles on this site. Debit Card vs. Credit Card, What Are The Differences ? Ah, the "good old days". If you are a baby boomer, like me, then you probably remember how important it was to rush to the bank on payday. Bankruptcy vs. Credit Counseling: What Should I Do? Credit Counseling and bankruptcy are both ways to relieve the stress of debt. However, they are very different and it is important to understand both before making a decision as to which is best for you. Different Ways to Borrow Money There are many different ways to borrow money. Outlined below is a useful guide to some of most common ways of borrowing money.
|
| home | site map |
| © 2006 |
