Playing the credit card loans game

The credit crunch has made banks and building societies reluctant to
advance as much money previously offered.

For that reason, people are changing their use of their credit cards to
become short-term loans, rather than just a convenient way to manage
payments.

The zero per cent initial offers make shuffling debts between companies
as easy as calculating a repayment strategy.

Steve Willey, head of credit cards at price comparison site
moneysupermarket.com, said: "Cards were once regarded as your flexible
friend to enable short-term borrowing as a buy now, pay later option for
purchases.

"However approximately 35 per cent of credit cards issued are taken for
borrowing, which normally extends way over the initial zero per cent
balance transfer period. As such, they are viewed as low-rate pseudo
loans. As long as the consumer is disciplined in not adding purchases to
the existing balance transfer, they will finish in front. But beware,
this only works if you follow the golden rules of making at least the
minimum monthly repayment on time and not spending on the card."

April 07^th 2008

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