Rate Tarts What are they
Below is a MRR and PLR article in category Finance -> subcategory Debt Consolidation.
Rate Tarts: What Are They?
Introduction
Leading market analysts report that "rate tarts" are costing the UK lending industry over one billion pounds annually. In simpler terms, they save themselves a billion pounds each year. But who are these "rate tarts," and why are they catching the attention of lenders?
Understanding Rate Tarts
0% Balance Transfer Credit Cards
These savvy consumers take advantage of competitive offers, such as zero percent interest on balance transfers. Nowadays, some credit cards also offer zero percent on new purchases. This level of competition is unprecedented, and many consumers are quick to seize these offers. Typically, these low rates last for a limited period, like six or nine months, after which the rates return to standard levels.
The Strategy: Surfing for Better Credit Deals
Rate tarts capitalize on these incentives. They enjoy the zero percent interest for as long as it lasts and then switch to another provider offering similar terms. This strategy allows them to maintain interest-free debts over extended periods.
A Word of Caution
While taking advantage of these offers is completely within their rights, rate tarts should be cautious. If lenders identify you as this type of customer, they might withhold their incentives. Although not common now, future policies could change if this trend continues.
Additionally, hopping from card to card without closing old accounts can lead to excessive available credit. Lenders might become concerned about your ability to repay if they see you accumulating potential debt. Therefore, it's wise to close each account after leaving a provider, rather than just discarding the card.
By remaining strategic and cautious, rate tarts can continue to leverage zero percent offers effectively while maintaining financial responsibility.
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