For several years now, anyone who was prepared to make the effort, and had a good credit rating, was able to transfer debts between credit cards and get 0% interest on their transfers. Many people did so.

The Credit Card suppliers clearly hoped people would stay with them once the zero interest period was over. No doubt a lot did but lot’s more didn’t. Hence the phrase Rate Tart appeared as part of our language meaning people that go from one good deal to another to another.

It couldn’t last and it seems that it is now coming to an end. Last year transfer fees started to become more common and now they are almost a standard. If the fee is 2% then it is still worth doing if you are talking of saving perhaps, 1.25% or more per month but the zero interest periods are shorter now, typically 6 months whereas a year ago you could get up to 12 months quite easily.

Should we be concerned? No, perhaps we should even applaud it. It was never fair and for every one of those rate tarts getting free interest there were lots of other people paying higher interest than they might otherwise have done and paying excessive charges for delayed payments or going over-limits. With all offers of this sort where a company appears to be giving something away for nothing, somebody has to pay. You can be sure it won’t be the company themselves.

Plenty of people would have got caught out by the interest free credit cards charging interest for purchases and any repayments made usually cleared the interest-free part of the debt first. So it wasn’t always as good a deal as it first appeared.

Can it ever be fair that, generally, poorer people subsidise those who are more financially astute and secure? “There is no such thing as a free lunch. A saying worth keeping in mind whenever you are looking at any sort of deal. If something appears cheap then there must be another way it is being paid for. It may be that you as an individual can take advantage as the rate tarts did but ultimately, someone has to pay.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

Related posts:

  1. Credit Cards, Drugs And Alcohol
  2. Contactless Credit Cards
  3. How Your Spending Power Is Reduced By Credit Cards
  4. Credit Cards The Hitman In Your Wallet
  5. Credit Cards Talk Of Reintroducing Annual Fees

Filed under: General

Like this post? Subscribe to my RSS feed and get loads more!