0 interest credit cards; are they a much needed lifeline or simply a tactic used to ensnare you into post offer high interest trauma! Many would agree that 0 interest credit cards are fantastic, but are they a long term strategy to help lower personal debt?
0 interest credit cards are an excellent way to reduce your credit card debt quickly but; is it possible to switch from one card to the next as the current deal expires and maintain a zero interest credit card debt?
The short answer is,
yes! In theory it is certainly possible to do this but in practice the likelihood of credit companies not seeing, and therefore not reacting to what you are actually doing is very slim.
0 interest credit cards make the credit companies little money until the offer period is over and interest is applied to the outstanding balance so why would they allow customers to continually sign up then leave before they make anything like the profit their shareholders expect? Again, the answer to this question is that they won’t.
They cannot make a customer stay with them beyond the offer period and therefore pay interest but they can decline applications of those they believe are likely to use these offers in this manner.
You may well get away with two or three 0 interest credit card balance transfers before you are rumbled and you will then start to find that your applications are declined more frequently.
This is not true in all cases as there are many who have practiced the art of credit card jumping to near perfection over the years, having continually moved balances from one supplier to the next without too much bother, but time is running out even for these veterans of the game.
The current economic climate has dictated that risk is not the best friend of lenders and therefore, lenders are becoming far more specific about who they will lend to. Customers who are very low risk who have no missed payments and have a high credit score, often reap the benefits of this, but even this group has started to be declined more often recently, and this is due to the more stringent checking of applications.
Previously, your 0% interest credit card application details would be fed to a computer and it would then pump out a result; either ‘approved’ or, ‘declined’ and that would be that! Now though, it is believed, that approved applications are then vetted manually for credit card user behavior.
If you are seen to be moving from one 0 interest credit card to the next you may find that your application will be declined, excellent credit score or not!
Look at it this way. Why on earth would a company approve an application, knowing fine well that the applicant will jump ship just as they are about to have interest applied to their balance?
0 interest credit cards are an ideal way to save money over a fixed period of time, that could be anything up to 18 months, but they are a short term solution to a bigger problem, that of personal credit card debt.
It is a wise move to use these offers not to save on monthly repayments but as a way to pay off credit card debt quickly and effectively by maintaining a level of payment that mirrors that which was being paid with interest added.
Doing this, if you do then manage to get away with two or three card jumps you could possibly remove completely or at least lower dramatically the amount of debt you have on your card, but be warned; as soon as you are declined the first time STOP making any further applications as you will most likely damage your credit score.
