It was a long time ago on a planet really nearby... Secretly, in the shadows, there has been a battle going on, a battle between the lone wolf 'card tarts' and the armies of the credit card companies. A card tart (also occasionally referred to as a rates tart) in case you didn't know is a person who applies for a credit card and works up a healthy balance. Then realising that the repayments are getting a bit steep makes a credit card balance transfer onto a card offering a 0% transfer free period, now averaging around 10 months. The problem is that after the period ends they want to transfer again and again and again. Ad infinitum! In other words they wielded their 0% cards in front of them, like a light-sabre, keeping the forces of interest oppression at bay.
If you aren't a card tart, but have tarting tendencies, then you need to know that the addiction develops along these lines. You have a card with a balance that has gotten a little out of hand. You are making your monthly repayments but are paying so much interest that you are hardly reducing the amount you owe at all. So what do you do? You jump to a card offering a 0% credit card balance transfer period. The length of this period varies from card to card but is now somewhere in the region of 10 months interest free. During these, say, ten months you pay off the balance as much as you can and then, not wanting to pay more interest, you leap to another card and so on.
The thing is that transferring balances become addictive in a weird sort of way. It is obvious why - you pay no interest and then the free period draws to a close and you simply don't want to go back to paying interest. It's understandable but the problem is that every time you transfer your balance it is recorded on your credit history, which affects future applications. The fact that so many people started transferring here, there and everywhere was the reason that the credit card balance transfer fee was introduced (currently it is around 3% of the amount you transfer) perhaps this didn't deter people as much as they had hoped. Now credit card companies look at credit histories more carefully for this 'tarting' trend and are reluctant to take on serial offenders, after all they aren't making much money out of the deal.
So how does the card tarter get around this? Well the best thing could be to take the battle still further underground. You may need to make it look less like you are a card tart and more like you are a normal credit card user. You could perhaps do this by making some token purchases on your credit card and paying them off. Or you could keep the card longer than the balance free period. Of course, this goes completely against the credit card tart's inner nature and the Jedi code but it could perhaps be the only way to make the most of 0% balance transfers. The point is that you have to side with the enemy slightly for your own mutual advantage. If you are declined for an interest free card then you could end up losing a lot more money than if you buy the odd purchase here and there.
Of importance here is the fact that the credit referencing agencies record cards that you apply for. If a bank notices that you have been changing cards over and over they may well decline your application. This is becoming more common. Of course, if you have an excellent credit history, not just of payment but of mature credit usage as well, then you will probably be accepted no matter what. Basically the trick is to use the card a bit as well as simply transferring your balance. In other words try and make it look as if you haven't just transferred for the interest free period - give the card company a little something back.
If you aren't a card tart, but have tarting tendencies, then you need to know that the addiction develops along these lines. You have a card with a balance that has gotten a little out of hand. You are making your monthly repayments but are paying so much interest that you are hardly reducing the amount you owe at all. So what do you do? You jump to a card offering a 0% credit card balance transfer period. The length of this period varies from card to card but is now somewhere in the region of 10 months interest free. During these, say, ten months you pay off the balance as much as you can and then, not wanting to pay more interest, you leap to another card and so on.
The thing is that transferring balances become addictive in a weird sort of way. It is obvious why - you pay no interest and then the free period draws to a close and you simply don't want to go back to paying interest. It's understandable but the problem is that every time you transfer your balance it is recorded on your credit history, which affects future applications. The fact that so many people started transferring here, there and everywhere was the reason that the credit card balance transfer fee was introduced (currently it is around 3% of the amount you transfer) perhaps this didn't deter people as much as they had hoped. Now credit card companies look at credit histories more carefully for this 'tarting' trend and are reluctant to take on serial offenders, after all they aren't making much money out of the deal.
So how does the card tarter get around this? Well the best thing could be to take the battle still further underground. You may need to make it look less like you are a card tart and more like you are a normal credit card user. You could perhaps do this by making some token purchases on your credit card and paying them off. Or you could keep the card longer than the balance free period. Of course, this goes completely against the credit card tart's inner nature and the Jedi code but it could perhaps be the only way to make the most of 0% balance transfers. The point is that you have to side with the enemy slightly for your own mutual advantage. If you are declined for an interest free card then you could end up losing a lot more money than if you buy the odd purchase here and there.
Of importance here is the fact that the credit referencing agencies record cards that you apply for. If a bank notices that you have been changing cards over and over they may well decline your application. This is becoming more common. Of course, if you have an excellent credit history, not just of payment but of mature credit usage as well, then you will probably be accepted no matter what. Basically the trick is to use the card a bit as well as simply transferring your balance. In other words try and make it look as if you haven't just transferred for the interest free period - give the card company a little something back.
About the Author:
John Evans writes for various popular financial websites. He specialises on providing consumers with clear information on credit card matters. Find out more about compare credit card and the UK card here.
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