Making use of 0% balance transfer credit card deals can prove to be an effective way for people to get to grips with their debts, an industry commentator claims.
Paul Clitheroe, founding director of financial planning firm ipac and chief commentator for Money Magazine, states that when “used properly” these credit card deals can be very helpful, with 0% balance deals currently lasting for anywhere from four to six months.
Writing in the Sunshine Coast Daily, he points out: "These can provide a useful window of opportunity to make a big dent into, or ideally, pay off your card debt without the burden of interest charges.”
Financial experts agree that Balance transfer credit cards can be a useful tool for clearing a balance, especially for those paying currently paying 15% interest or more.
However, it was suggested that those looking a this kind of credit card deal should clear as much of the debt as possible withing the 0% duration, as after this time the interest rates applied are usually significantly higher than the average rate.
He claims that these credit cardholders could easily slip "back where they first started, facing insurmountable, high interest debt".
Mr Clitheroe also warns against going on to make purchases on balance transferred credit cards as doing so is likely to see them be charged a higher amount of interest than that attached to the sum.
Furthermore, any debt payments are likely to be applied first and "only after that's been repaid will further repayments be applied to the new purchases sitting there racking up high interest debt".
Such statements come as Mr Clitheroe reveals that as the nation has a total outstanding credit card debt of $33 billion, many people are facing an uphill struggle in getting their finances under control.
Meanwhile, a Money-AU.com article recently claimed that while 0% balance transfer deals can be a useful tool for controlling finances, those looking to consider a card must be aware that they are likely to have to pay a transfer fee calculated as a small percentage of the amount transfered.
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