Wednesday, June 8, 2011

Fix Bad Cedit

0% Credit Card Transfers are back but with confusing terms

In recent postings, Credit CRM professionals have explained that 0% credit card transfer offers are coming back surprisingly ahead of schedule. Just a few years ago, many heavily in debt credit card holders thrived on the ability to cheaply transfer balances from card to card, paying off plastic with plastic. Sometimes consumers used low interest and 0% credit cards as a means to borrow for high risk investments such as stocks. As a recession set in and banks became swamped in bad debts as a result lenient lending behavior and risky consumer behavior, banks and credit card companies become much more stringent in their who they loaned to. Lenders began to lower credit limits and retract low interest and 0% transfer offers that often attracted consumers that were already buried in debt.

In 2009, many financial experts predicted that such offers would be gone for years to come, if not for a very long time. Instead, in 2010, we’ve seen a quick return of such offers, being initiated by most of the major credit card companies. Credit experts note that while these offers were common in the past, they are now usually only offered to those with excellent credit. Also, while these offers may look like a good option, new stipulations often indicate trouble for borrowers in the fine print.

Recent reports have shown that more and more consumers are becoming confused by the recent offers. Key areas of confusion include which offers are best, new transfer fees, and how payments are applied. When it comes to finding out which offers are the best, experts recommend checking to compare offers. There you’ll be able to find out transfer fees are associated with each low balance transfer offer. Today, transfers are usually about 3-5% of the balance, but you can expect to see rates as high as 7%. Consumers can also check out how payments are applied and whether they’ll be expected to pay interest on the original balance, or simply the remaining balance at the end of the low interest period.

Credit repair specialists advise that it is very important to remain cautious with such offers. Getting caught up in high transfer fees and ballooning interest rates, could put you in more debt, further damaging your credit score.


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