Introductory Rate Credit Cards Some Popular Features
Below is a MRR and PLR article in category Finance -> subcategory Credit.
Introductory Rate Credit Cards: Popular Features
Summary:
Introductory rate credit cards have become a favored strategy for UK borrowers to manage credit card debt effectively. These cards offer a special interest rate for new cardholders, providing significant advantages.Key Features:
0% Balance Transfers
One of the most attractive features is the 0% balance transfer offer. This means no interest is charged on transferred balances for a specified period, typically between three and 12 months. To make the most of this, borrowers can engage in "rate surfing" by transferring balances to new cards before the promotional period ends. While credit card companies aren't keen on this practice as it cuts into their profits, it allows consumers to reduce their outstanding debts instead of paying interest.Fixed Low Balance Transfer Rate
Another popular feature is the fixed low interest rate for the lifetime of a balance transfer. This means the reduced rate applies as long as the debt remains on the card. For instance, a card issuer might offer a 4.9% rate compared to a standard 13.9% variable rate. This option is great for those paying higher interest on existing debts, offering substantial savings and faster debt repayment. Rate surfing becomes less beneficial unless a better rate is available elsewhere.Permanent Low Rate
Some cards provide a low ongoing rate on new spending, usually a few percentage points below the standard variable rate. This is ideal for regular spenders, as most balance transfer offers come with higher rates for purchases, cash withdrawals, and credit card cheques.Additional Incentives:
Beyond low rates, many credit card issuers offer extra perks, such as:- Contributions to charity via card usage
- Discounts on certain brands
- Cash back rewards
- Additional insurance on purchases or travel
It’s important to note that many companies now charge a one-off fee for balance transfers. Therefore, it's advisable to shop around for the best combination of interest rates and incentives.
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