'Rate tarts' have options reduced
Posted on February 29th 2008
People who use credit cards to borrow money by taking advantage of zero per cent new-customer discounts, known as rate tarts, are finding that their choices are becoming limited.
An analysis of lenders shows that there are only nine companies, although they may operate under several names, who are now offering credit cards which start with no interest on balance transfers for longer than an eight month period. All of those have a one-off fixed balance transfer fee.
David Kuo, head of personal finance at Fool.co.uk, says: "One area of lending that is still going strong is the zero per cent balance-transfer credit card.
There are plenty of deals available, though not all deals are always what they appear to be. Consumers who intend to use zero per cent balance-transfer cards need to be aware that while there may be a plethora of cards, there are effectively only nine genuine cards that will do what they say on the tin.
David Kuo also warns that users should calculate the actual amount they would be spending on interest before switching and incurring the fixed fee transfer.