Lifetime balance transfers

If you have a large balance to transfer but expect to pay it off over longer than a year then a lifetime balance transfer credit card could be ideal.

Why choose a lifetime balance transfer card

Although millions of credit card users have sensibly been taking advantage of introductory 0% deals, many are getting fed up of having to switch debts to a new card every few months to get the benefits. In fact, research shows that around half don't bother to transfer partly because they think it's too much hassle.

There is, therefore, a growing number of customers who want cards that charge permanently low flat rates of interest so that they don't have to continually switch providers when introductory periods expire. As a result companies are now offering lifetime balance transfer rates which simply means that you'll be charged a simple low flat rate until your debt is paid off completely.

Lifetime balance transfer card, loan or remortgage?

Some of the rates on offer for this type of credit cards are lower than the rates you can get for personal loans and mortgages (although some do charge a 2%-3% balance transfer fee). This makes them a very cost effective way of paying down debt over a period of a few years. Most cards offer a fixed lifetime rate too, protecting you against future rate rises.

Sensible spending rules

Be careful about spending on the new card after you've found a low flat rate. If you make new purchases, these will most likely attract a much higher rate of interest. Your monthly repayments are also likely to be allocated to the lifetime balance part of the bill so your new purchase borrowing will sit quietly in the background racking up tons of interest until you've paid off the transferred balance

For people juggling multiple cards, sticking your combined debts on to one long-term low rate card certainly makes it easier to track your finances. But, as ever, beware of the small print.

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