Independent UK Credit Card Comparisons | Today is Thursday, February 9th, 2012
 

"Are you a Rate Tart?"

By admin | June 23rd, 2008 | Featured

A dozen in five years

Rate tarts: people who change credit cards at the ‘drop of a hat’ to take advantage of extremely low interest, or interest free, periods on different cards.

To notch up a dozen or so cards in the space of say, five years, is common. A rate tart could be swapping cards every few months depending on what’s available and could end up with a whole handful of active cards.

Then what?

A case of discipline

There are issues with being a rate tart. Not the least of which is having the discipline to destroy the old card when you move your balance from one card to the next. Some people have got themselves into real financial difficulty by switching cards and then using the old cards as well as having the zero percent interest in the new card.

The golden rule

Simple: don’t ever use the card you switch your outstanding to for anything except debt consolidation at the lowest interest rate possible.

If you do ever use a card for another purchase then any repayment onto that account will not go to pay off the sum earning the highest interest it will go to reduce the zero interest portion. So any savings you may have made by transferring to the new card will be instantly lost.

Timely payments

Even more important is to pay on time each month. One of the conditions of the offer is that payments are received by the due date every month. Saying that you lost the statement isn’t going to influence the credit card company and it’s a sure-fire way to get a late payment penalty and even your interest rate hiked up.

I’m in too deep

Being a rate tart can sometimes be a way of lessening the pain of acknowledging the debt you have. The thought process goes something along the lines of, “It’s OK because it’s not costing me anything to have these thousands of pounds on my credit card.”

Well, the truth of the matter is that actually all you are doing is delaying the day when you will have to face up to the debt and start to think about how you are actually going to pay it back.

It’s not yours to keep

Credit cards are not your money. They are a simple way to borrow somebody else’s money. And that somebody else will want their money back sooner or later. In effect you are really surfing for free credit.

Works like a dream

Credit cards and being a rate tart needn’t be a nightmare. Some people are able to really play the system. It has been known for people to take advantage of a zero percent loan on a credit card, use that money to pay into their offset mortgage account and effectively pay part off the monthly interest incurred on that beast.

With interest free periods on offer up to a year at a time that can really make sense. But you have to really know what you are doing and it isn’t recommended for the faint-hearted!

Rate tart or financial innocent?

At the end of the day if you are a rate tart it appears that you, like millions of others, are playing the system for what its worth. Whether you are in financial trouble or making the most of what the market has to offer it has been estimated that these zero rate cards cost the industry £1bn a year in lost revenue.

Zero percent was introduced to encourage customer loyalty and to nurture new business. Quite how the credit card companies thought that was going to work remains a mystery.

The availability of easy loans is a tempting offer. But when these rates cease and rate tarts are left stranded without their zero percent, like a bride deserted at the church, hopefully it won’t end in tears for everybody.

Tags: rate tart

Related Articles:

  • Get your card provider to cut your interest rate

    An industry official has suggested that many customers could be paying for too much interest on their credit cards, stating that credit card companies have failed to cut the interest rate on cards despite three recent cuts in the base rate from the Bank of England. In fact, industry experts state that credit card companies...

  • AMEX interest rate rockets

    Recent reports have shown that one major credit card provider has increased the interest rate on one of its credit cards to over thirty times the base interest rate, charging a massive 46 percent APR on the card. The astonishing interest rate has been applied by American Express on its British Airways Premium Plus credit...

  • Are price comparison sites likely to get you the best deal?

    Over the past couple of years many different price comparison websites have sprung up all over the Internet, claiming to provide speed, ease, and convenience for those looking for the best deals on a wide range of products and services. You can purchase all sorts of products and services through price comparison sites these days,...

  • The problems facing credit card rate tarts

    Over the past few years the term rate tart has been banded about a lot, and the wide range of credit cards has come onto the market over recent years has resulted in borrowers being able to save a small fortune on their borrowing. The launch of 0% balance transfer credit cards has played a...

  • Don’t get talked into a high rate credit card

    It has recently been announced that credit card rates have reached their highest in thirteen years, even though the base interest rate remains at its all time low of 0.5 percent, where it has been for nearly two years. Many borrowers may have thought that this would equate to more affordable borrowing on credit cards...

Post A Comment:


Virgin Credit Card image

Other Recent Articles

Useful Tips for Credit Card Holders

Modern technology offers comfort and convenience that is often helpful for people in a fast paced everyday living. With just...

By admin | February 7, 2012 | Read More

Credit card decision by Lloyds could have serious effect on charities

For many years now, a range of leading and well known charities have been able to boost the levels of...

By Reno | January 28, 2012 | Read More

Many have to rely on credit cards to make ends meet

There was a time when people had credit cards to enable them to pay for occasional larger, more expensive items...

By Reno | January 26, 2012 | Read More

Brits increasingly dissatisfied with credit card providers

According to recent reports, Brits are becoming increasingly dissatisfied with their credit card providers, particularly in the case of the...

By Reno | January 20, 2012 | Read More

Now is the time to look for a good credit card deal

Over the next couple of weeks many people who shopped till they dropped over the Christmas and sales periods will...

By Reno | January 10, 2012 | Read More