Free lunch anyone?

Discussion in 'Trading' started by Riskmanager, Jan 6, 2006.

  1. Confessions of a rate 'tart'

    Banks can no longer afford to finance 0% credit card offers, according to a new report, as the deals are costing £1bn a year in lost revenue.

    One self-confessed rate tart explains how he has made the most of cheap credit, by switching frequently between deals:

    I would definitely class myself as a "rate tart". I have changed cards more than a dozen times in the past five years, switching accounts to make the most of 0% offers - and even made money out of it.

    I have just arranged another card. That will take me into next summer.

    The process is extraordinarily simple - you can do it online. I have never been turned down.

    I've found that far from becoming more restrictive, it has become even easier to get the 0% deals. Many of the providers have extended the interest-free period, from six months to nine months. It is also possible to negotiate additional 0% periods with some lenders.

    I've been caught out once. I missed the end of the 0% interest-free period by one day and was charged interest on the total debt. You have got to be really assiduous about not missing the end of the interest-free term.

    However, I've also made the odd few hundred pounds by borrowing extra within the interest-free period and then paying it back at the end of the period.

    This is possible because some of the companies will simply let you put a lump sum into your current account at 0%, as well as transferring an existing balance. I've subsequently put this money into tax-free savings accounts and earned some interest.

    Personally, I don't think the credit card companies will stop offering these deals. It's still in their interest to do so. Quite frankly, I've heard it all before.

    But I wouldn't recommend it necessarily; because you postpone the "evil hour" when you have to repay your debt, it takes the pressure off and your debt can increase.