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LIFE of balance transfer credit cards offer a low rate on the balance moved over to the card until it is repaid in full. So the ‘life’ period refers to the life of the balance.
While these balance transfer offers do not offer a 0% rate, the upside of life of balance transfer credit cards is that there is no ending promotional period to worry about, giving you the peace of mind of a low interest rate until you are able to clear the balance in full.
It is important to mention, that are also some "life of balance transfer" credit cards that offer a low rate for several years, as apposed to the life of the balance – often while these periods give plenty of time for repayment, they do have a set end date.
What interest rates are available on life of balance transfer cards?
Life of balance transfer credit cards offer interest rates usually between 4% p.a. - 5% p.a. While this isn't 0% these rates are still well below the cheapest standard rate found on a credit card and they will offer considerable savings to the interest you are probably being charged on your current credit card.
The majority of life of balance transfer offer rates are fixed – so even if there are fluctuations in the base rate, the rate you are charged will remain the same.
Are there any transfer fees to pay?
Finding a balance transfer deal without a transfer fee is fairly hard to come by these days, however, where a card is transfer-fee free it is usually found on the life of balance transfer credit card offers.
The benefit of not paying a transfer fee is mainly in savings on the initial outlay of getting a better deal for your debt.
However, transfer fees are easily outweighed by savings in interest charges on 0% balance transfer credit cards if you are able to repay your balance during the introductory period.
What repayments will I need to make on the life of balance transfer offer?
As with any promotional rate deal – or any credit card balance for that matter – you will need to make at least the minimum monthly repayment, which will generally be around 2% - 3% of the balance outstanding.
If you fail to make the minimum monthly repayment you are in jeopardy of losing the promotional deal, so it’s vitally important to make these monthly payments. Of course, the more you can repay each month the quicker you will reduce your balance and pay less in interest charges for clearing it sooner.
Should I choose a life of balance transfer deal over a 0% deal?
The choice between deals largely depends upon the timeframe you are able to repay your outstanding balance in, and also your personal preference on a simpler option or one that may require a further balance transfer.
0% balance transfer credit cards generally offer better savings if you are able to clear the outstanding debt within the introductory 0% period – usually up to 15 months.
Life of balance transfer credit cards on the other hand are usually better suited to people who want a greater period in which to comfortably repay their debt - without the worry of ending promotional periods and needing to move the balance again.
Life of balance transfer credit cards are the simpler option for larger debts, they can offer a much more solid relief from the pressure of high interest rates on outstanding credit card balances.
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