Paul Clitheroe gives advice on Balance transfers
Posted at by ifydcat on category CreditMaking use of 0% balance transfer credit card deals can prove to be an effective way for people to get to grips with their debts, an industry commentator claims.
Paul Clitheroe, founding director of financial planning firm ipac and chief commentator for Money Magazine, states that when “used properly” these credit card deals can be very helpful, with 0% balance deals currently lasting for anywhere from four to six months.
He pointed out in the Sunshine Coast Daily: "These can provide a useful window of opportunity to make a big dent into, or ideally, pay off your card debt without the burden of interest charges.”
The financial expert asserts that people that currently have a credit card with rates of 15% or more should definitely consider getting a balance transfer credit card.
Aussies looking towards using such a credit card deal, however, were advised to ensure they clear as much debt as possible during the course of the introductory period as upon its expiry the amount of interest they will be charged could be "very high".
He claimed that these credit cards users could find that they end up "back where they first started, facing insurmountable, high interest debt".
Mr Clitheroe also warns against going on to make purchases on balance transferred credit cards as doing so is likely to see them be charged a higher amount of interest than that attached to the sum.
Furthermore, debt payments are usually applied first and "only after that's been repaid will further repayments be applied to the new purchases sitting there racking up high interest debt".
Such statements come as Mr Clitheroe reveals that as the nation has a total outstanding credit card debt of $33 billion, many people are facing an uphill struggle in getting their finances under control.
Meanwhile, a Money-AU.com article recently claimed that although the balance transfer feature is an effective tool, borrower interested in acquiring such products should be aware that there is usually a transfer fee applied to the balance.