Zero Balance

It would have been unthinkable just a decade ago, but now it is common place in the UK to hear of zero per cent credit cards. Brought about by fierce competition, both from UK and American lenders, and also by historically low interest rates, zero per cent credit cards have become extremely popular. Today, it is almost impossible to find a lender that does not offer some form of zero percent credit card. They simply have to if they want to compete in the business as it is run today. However, before you start signing up for a zero per cent credit card, you should be aware that there are different types of zero per cent card and you will need to be aware of what it is you want to use the card for before you decide which type is right for you.

The first thing to consider is cash advances. These are typically charged at higher than normal interest rates and it is still extremely unusual to find a credit card that will give you a cash advance at zero per cent. So if you are looking for zero per cent cash, then it is unlikely that a credit card is going to give it to you.

Zero per cent purchases however, is something you might have a better chance of getting. There are now a number of cards on the market place that offer customers zero percent on new purchases. So if you would like to for example buy something large and expensive, and cannot get a good financing deal to fund the purchase, then perhaps buying it on a zero per cent on purchases credit card would be a good way to go. You will be charged no interest at all, and will have the entire interest free period, usually of six to nine months to pay back the amount without incurring any interest charges.

Probably the most common form of zero per cent for a credit purchase is on balance transfers. So if you find yourself paying a lot of interest on existing credit card balances, then you could look into transferring this balance onto a new credit card that offers you zero percent to do so. This has the potential of saving you hundreds of pounds in interest payments.

Finally, if you are one of those customers that is in the habit of paying off your credit card bill in full every month, then you will not need a zero per cent card at all. This is because you already pay no interest. In this case you would be better of looking for a card that offers some cash back or other form of reward rather than a zero per cent interest.

Getting the best deal on a credit card is not always about jumping from one 0% APR card to another and getting a bad name for you. As you will because the credit card companies are getting wise to this and are beginning to refuse serial jumpers their credit card application.

This though is not aimed at those who up until now have found it easy to get their hands on any credit card that they choose; this article is aimed at those who find it extremely difficult to get their hands on a credit card at all and can only dream of taking advantage of all the 0% interest deals that are out there.

Your low credit rating can affect your application

This is down to the fact that many potential credit card customers have such a low credit scoring that the credit card issuers; see them as too much of a credit risk. So they ultimately refuse issuing those with a low credit scoring the cards, as they only want those, who they see as profit making customers. This can even happen to you if you have no debt and never have had debt, as the credit card lenders only go on credit information that is held on you on their data bases. So if you have no credit history, they will more readily refuse you one of their cards.

What you have to remember though, is that you should not take your anger out on the credit card company as you have no divine right to expect them to let you borrow their cash just because you want it, they have to be sure that you are a worthy credit risk. To combat this, the first thing that you should not do is to apply again and again to different credit cards, credit agencies or banks for loans, this will only dig the hole deeper for yourself. The next time you apply for any type of credit it will be known that you have applied before and been rejected in the past, so they will find theyre answer easier to come by.

For credit card advice please visit here For credit card advice please visit here www.creditcards-gb.co.ukcreditcardadvice.htmlcredit card advice

Get your credit rating background

What you should do is contact a credit reference agency, to see where you are going wrong and maybe find the reason why the credit cards are not letting you handle theyre plastic. Ask the credit card company who have refused you, which credit reference agency they use, this will normally be one of two the main ones which are Equifax and Experian. Once you have ascertained which one it is, you can write to them asking for a detailed run down of your credit history. This will normally cost a couple of pounds, but will be a worthwhile practice to help you get your credit scoring back up.

Once that you have found out where you have gone wrong in the past, you can then begin working on getting your credit scoring up. You may wonder as how this can be done if you are not allowed credit, but by keeping your household bills up to date and paid on time, making sure that you can prove where you live, make sure that you are on the electoral role and make sure that you never lie on your application for credit. These are all simple things and if followed through, you will not only find that your credit rating will go up, you will also be able to build on it and be able to one day get the best credit card deals and when you want them.

Everyone knows that credit cards are synonymous with debt. However, many people are taking advantage of 0 interest credit cards and making a profit. You just have to learn how to do it before you start. There is no reason whatsoever to make small profits if you are already paying out large sums of money on other debts that you already have. You must first pay off all your high interest credit card debts to benefit.

You must pay close attention to when the introductory offer expires with 0 interest credit cards. If you pay off all your debt prior to the expiration, you will, of course, be saving money.

When using 0 interest credit cards you must try to forget about them and only use them when it is absolutely necessary. You do not want to incur a large debt that you cannot pay back prior to the expiration.

Be sure you have a good credit rating prior to starting on your adventure with 0 interest credit cards.

Now, look for credit card companies that are offering a 0% interest rate. You can find some that offer 0% for six months, 9 months and even some up to a total of 12 months.

Heres how to profit from the use of 0 interest cards. First, transfer the credit limit available on your 0 interest credit card into your bank account as a direct transfer or as cash. Now, transfer the balance you have on your other credit card onto your 0 interest credit card as well, in order to pay off your balance on that card. The money you just received should go into a high interest savings account at your bank. Do not touch this money until your 0% percent is about to expire. You will still owe the money that you transferred on to it, but you will be earning interest on the money in the bank. You will now be able to pay off the balance with the money in the bank and have as well as a chunk of earned interest for yourself.

Remember, for this to work, you cannot run up your payments or charge more on your other card. As long as you have an excellent credit rating, this will work wonders for your bank account and your wallet, if you pay very close attention to the expiration of the 0 interest credit cards before they begin charging the higher APRs. If you do not remember to pay it off prior to the expiration of the 0% interest introductory rate, then you will find yourself owing money at a higher interest rate.

Need A Credit Card? No Problem. And That’s The Problem

Need a credit card? No problem! And that’s exactly the problem. In a nation where instant gratification is touted as a virtue, credit is available to anyone no matter what their credit history. This is causing personal and financial problems for many consumers who abuse the easy availability of credit and find themselves unable to pay back their loans.

There was a time in history when extensive credit was available only to the aristocracy, and debt carried a social stigma for anyone else. The poor and middle class were carefully scrutinized when they applied for loans, and debtor’s prison awaited those who did not repay their debts.

Americans are more indebted than ever in the nation’s history. The amount owed on loans for cars, homes and credit cards adds up to nearly 100% of annual after-tax income, according to a report in Business Week magazine. Yet, according to the Consumer Fedaration of America, this alarming level of indebtedness has not deterred the moneylenders: credit card companies have more tha 3 trillion of unused credit lines up for grabs, approximately 30,000 per
American family.

According to Fair, Isaac and Co. (FICO), the average consumer has access to 12,190 on all credit cards combined. Not everone is a spendthrift: more than half of cardholders use less than 30% of their total credit limit. However, one in eight is using 80% or more of their credit limit, and 1 in 10 have a total debt greater than 10,000. Cardweb.com estimates that 20% of American credit cards are maxed out.

There are specialized credit cards being offered to all kinds of borrowers, from students to small business owners. Each demographic group is targetted with a specific sales pitch.

People with good credit ratings can easily access lines of credit at an interest rate of 5% or less over the current prime rate, and such applicants are also qualified for Platinum credit cards. However, about half of cards in circulation are Gold cards, which require just 10,000 in annual income for qualification.

The credit industry uses credit scores to divide potential customers into “prime” and “subprime” markets, referring to the prime interest rate set by banks. Elite borrowers can obtain a line of credit on a Platinum card at an interest rate around 12%. A Gold card carries an average interest rate of 15%, while a standard credit card charges rates around 17%.
Then there’s the subprime market, which first emerged in the 1990s, dealing with consumers whose credit scores are 500 or less, little or no credit history, those emerging from bankruptcy and anyone with an inconsistent performance in managing credit. These people are often low income earners andor poor money managers, but the credit card industry finds a way to profit from these most needy of borrowers.

Unlike “secured” credit cards, cards offered to subprime borrowers require no security deposit. Credit limits start out very low — initially in the 100 to 500 range. However, fees can be hundreds of pounds and interest rates can easily soar to usurous rates of 30% or more.

The industry also offers “secured” credit cards to offer high-risk customers. Borrowers are required to pay an up-front security deposit from 99 to 5,000 to serve as collateral in case of default.

Many social and business commentators have denounced the subprime lending business for exploiting the poor, comparing the industry’s problems to depression-era banking scandals. Lenders take on poor and desparate customers at their own risk, writing off losses in the 15% to 17% range, versus the average industry loss rate of 6.5%, according to CardWeb. The delinquency rate among subprime card issuers is 10%, twice as high as the industry average. Some credit card companies, such as NextCard, have been unable to recoup their losses and have closed up shop.

According to many pundits, the American economy has been thriving in the past 5 years, with a steady growth in the GDP. However, 90% of this growth has been due to the housing bubble; real wages have declined by 4% since 2000 while health costs have risen by 40%. Middle and lower class Americans are becoming increasingly financially squeezed and unable to pay their debts.

A record number of 1.3 million cardholders filed for bankruptcy in 2004. In response, the credit industry lobbied successfully for stricter bankruptcy laws. However, according to the Consumer Federation of America, the increasing incidence of loan defaults did not spur the card companies to become more discriminating in their choice of customers. In fact, they actually boosted their promotional campaigns to a record 5 billion solicitations ( approximately 50 per American household) compared to 3.5 billion the previous year, many of these ads targeting the sub-prime market.

Now consider the debit card: it is decorated with the Visa or Mastercard emblem, and has all the functions of a credit card in that can be used at a cash register and for internet and telephone purchases. However, it takes money directly out of the cardholder’s bank account and allows no more spending once the account is empty. A debit card has no monthly fees and no interest charges, and no chance of getting into debt. Perhaps this is the best consumer solution to a credit-mad economy.