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Q. Why transfer an existing balance to a new credit card?
A. The savings to be made are simply enormous.
If like many, you have debts on credit or store cards, shifting to a new card with a special ‘balance transfer' offer is a must.
The cheaper interest rate, ideally 0% on the new card, would mean more of your repayments going towards reducing what you owe, rather than paying the lender more interest. This will make you debt free quicker.
There are a huge number of lenders offering great deals for balance transfers. Picking
the right one for you depends on whether you are prepared to shift the balance every
6 months or so, depending on when the preferential rate -
If this sounds like too much hassle, then you need to choose a card that has a low balance transfer rate for the life of the card.
If you are prepared to do some work yourself then you can opt for a 0% balance transfer rate card – there are always good offers out there. RBS Credit Cards are usually competitive but do shop around.
Always make sure you check out the transfer fee being charged as this can vary from card to card. Simply apply online for a new card and then transfer the balance. Remember though to never spend on this card – just transfer the balance and put the actual card in a drawer.
Well, most of these cards don’t offer a preferential rate on purchases made using
the card. Which means you could end up being charged a higher rate of interest for
anything you buy using the card.
By way of example -
Our advice is to not think of the balance transfer card as a credit card – think of it more as a loan which needs a monthly repayment. Then take a note in your diary or calendar for 6 weeks before the preferential rate runs out to apply for a new 0% card.
This is commonly know as ‘tarting’. It is of course a a perfectly legitimate way to reduce debt in a cost effective way.
It’s very important to remember to transfer the balance to a new card before the preferential rate runs out, or you will end up being charged interest.
If, on the other hand you have debt that you just want to shift to a lower rate, then you can opt for a card that will charge a very low rate of interest for a longer period than a 0% card will, perhaps even for the life of the card.
Again there are various to choose from. My advice is the same as for ‘tarting’ – don’t look on this card as a credit card – think of it as a long term loan.
Be careful using long term cheap credit cards
All these cards will offer enticements in order to get you to spend on them,i.e.
cash back for spending. Yet do this, and all benefit from the cheap balance transfer
will be lost.
So search around for the best deals which are changing quickly. Check out RBS Credit Cards and the Nationwide online.
Take advantage of these enormous savings and start your journey to being debt free.
10 ways to deal with worries about your mortgage
Mortgage rates are on the rise again – and, as banks struggle to come to terms with turmoil in the global money markets, homeowners are struggling to keep pace with the growing cost of their mortgages.
According to a recent study, more than 1 million people are resorting to using high interest credit cards to cover their mortgage payments leaving them at risk of eviction or repossession. Repossessions rose 65 per cent during 2006, according to the Council of Mortgage Lenders, and are expected to escalate as people come to terms with household debt, which is now running at 150 per cent of average annual income.
But losing your home isn’t inevitable, even if you’re having trouble making your
mortgage repayments. Here are some ideas that could help you to keep the roof over
your head.
1. Speak to your mortgage lender – they will do their best to help. For example,
if you have a repayment mortgage, you could switch to an interest-
2. Get advice from a specialist charity or organisation. Try Citizens Advice – you’ll
find a local office in the phone book or at www.citizensadvice.org.uk – or the Consumer
Credit Counselling Service (CCCS) at www.cccs.co.uk. There is no need to pay expensive
private agencies – these services are free.
3. Check your credit report with CreditExpert. This is the personal history of the
credit you have taken out, from your mortgage to catalogue accounts. It will give
you a snapshot of how much you owe and how well you are coping. Lenders look at your
credit report when they decide whether to make you an offer and what terms to set,
so it’s crucial that it’s up to date and accurately reflects your position. A repossession
will stay on your credit report for six years – the same length of time as an Individual
Voluntary Arrangement or bankruptcy – and could make it difficult for you to get
credit in future or result in you paying higher interest. See your credit report
for free, here.
4. Work out a budget. Start with what you are spending now and see what you can trim
– remember essential bills, such as utilities, council tax, insurance and food. You’ll
find a budget calculator on the website of the FSA, the UK’s financial watchdog,
which also provides a mortgage calculator – go to www.moneymadeclear.fsa.gov.uk.
The Council of Mortgage Lenders at www.cml.org.uk also offers a mortgage calculator
that allows you to see the impact of any changes to your mortgage or level of payments.
5. Pay what you can. Even if you can’t manage the full amount, you should pay as
much as possible. This shows your lender that you are making an effort and may increase
your chances of negotiating an affordable deal.
6. Investigate financial help – for example, you may have mortgage protection insurance
or be able to claim benefits.
7. Supplement your income. If you have a spare room, you could take in a lodger –
up to £4,250 a year is tax-
8. Look at taking out a new loan to pay your debts. Shop around and you could find
a deal that works out cheaper than paying off a series of individual bills – your
credit report will help you to see where you might make savings. But be careful –
if it is secured against your home, you could be putting it at even greater risk
if you miss any repayments.
9. Don’t hand back the keys. If you’re desperate, it’s far better to sell your home
yourself – at least you’ll still have somewhere to live while you market it. If you
give the keys back to your lender, you will be responsible for the mortgage until
it’s sold and you could have to pay any shortfall if the lender sells it for less
than the value of the mortgage.
10. Be wary of sell-
• Your credit report is the first place to look when you’re worried about your borrowings
– it gives you an instant snapshot of how well you are managing your finances. You
can see your Experian credit report as often as you like with a free, 30-
Brought to you by Pointme2it partner Experian.
Don’t forget Pointme2it’s -
RBS Credit Cards are offering your favourite photo on your RBS Credit Card for just
£10. Old and New cards, find out more here.
Latest Money News -
Press Release
08 April 2008
POST OFFICE® REWARDS CUSTOMERS WITH £50 CASHBACK BONUS FOR CAR AND HOME INSURANCE
The Post Office® is offering customers a £50 cash back bonus when they take out a
new car or combined buildings and contents insurance.
All customers need to do is get a quote and sign up to Post Office® car, van or buildings and
contents* insurance, by visiting Post Office
Post Office® director of insurance Phil Ashkuri said: ?We advise people to look carefully when choosing new insurance cover as many providers may offer great promotions but the detail of the policy may not deliver the right level of cover or value for money.
"But, there are things people can do to ensure they get the best possible deal. For example, checking your level of excess can help reduce your premiums."
The Post Office® is currently one of the fastest growing insurers in the UK and has over 620,000 car and home insurance policies in force.
For more information visit www.postoffice.co.uk
Ends
Post Office® Car Insurance includes:
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beyond repair and under 12 months old
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Post Office® Van Insurance includes:
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Post Office® Home Insurance includes:
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Pointme2it adheres to strict Financial Services Authority (F.S.A) regulations.
For
financial advice concerning any articles on this site please consult with an Independent
Financial Advisor.
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