|
||||||||||||||||
|
End of Rate Tarts? 30/3/05Now that the customers have got one over on the credit card companies, there is going to be changes brought in to stop the upsurge in “Rate Tarts”. This is the term for the people who have used the 0% interest deals to their advantage by jumping from one 0% free period deal to the next, meaning that you can take on debt that wont cost you a penny in interest charges. This has recently been accounted for costing credit card companies in the region of £1 billion a year, that would normally been taken in interest payments and they are not happy, so the future of the 0% balance transfer deals looks bleak. The credit card companies are now looking for their customers to be more loyal, to stop the influx of “Rate Tarts” costing them any more cash, but this seems a bit two-faced considering the way that our custom has been handled in previous years, with little or no thought of loyalty to us. You would think that with balances owed by the good old British public standing at £60 million on over 70 million credit cards, that the credit card issuers were making enough money, out of people who they have willingly gave a credit line to knowing that they may not be able to afford to pay it back. With APR’s of anything up to 29.9% they are the ones who seem to be taking advantage, but don’t appreciate it being on the other foot. That is why they feel the need to complain “Rate Tarts” are costing them so much each year, as many take up the game of credit card chess by making moves at the right time, by switching from one 0% deal to the next. Some are even taking up the offer of a “Super Balance Transfer” that lets you pay off any other debt that you may have such as personal loans. But some are using this to transfer the cash into a high interest savings account and when the 0% period is almost up, withdrawing the cash that credit card issuer basically let you watch for them, back to them leaving you with the interest gained in your account, giving you free money for no cost to you. This has all come about with the introduction of the 0% deals that started with a period of 6 months, rising to nine months and then the first 12 month deal was put on the table by Barclaycard, this was then equalled by Lloyds though they were not offering the 0% deal on any new purchases that were made in that time. This ultimately led to the emergence of the “Rate Tarts” which are now trying to be curbed by the card issuers, who are now beginning to introduce transfer fees when you switch cards, this was first thought of by Barclaycard and card issuers such as Mint and MBNA are likely to follow suit as they all try to pull back some of the money they are losing. Barclaycard are charging a 2% fee to a max of £50 on any amount balance transferred. If you are in the “Rate Tart” business then it’s time to be a little more vigilant as the credit card companies start to play hardball again, to make us pay for the little gift that was 0% balance transfers, that at the end of the day they didn’t realise that the customers were not as daft as the credit card issuers thought. So be a happy “Tart” but take care.
|
|||||||||||||||
|
|
||||||||||||||||
