Making use of 0% balance transfer credit card deals can prove to be an effective way for people to get to grips with their debts, an industry commentator claims.
Paul Clitheroe, founding director of financial planning firm ipac and chief commentator for Money Magazine, states that when “used properly” these credit card deals can be very helpful, with 0% balance deals currently lasting for anywhere from four to six months.
Writing in the Sunshine Coast Daily, he points out: "These can provide a useful window of opportunity to make a big dent into, or ideally, pay off your card debt without the burden of interest charges.”
Financial experts agree that Balance transfer credit cards can be a useful tool for clearing a balance, especially for those paying currently paying 15% interest or more.
People looking to use this type of card to move existing debt across are advised to clear as much of the balance as possible before the 0% period expires, as after this point rates are likely to be very high.
He claims that these credit cardholders could easily slip "back where they first started, facing insurmountable, high interest debt".
Mr Clitheroe also urged credit card users not to mix both balance transfers and purchases on the same card, as by doing so consumers are likely to see higher interest charges.
Furthermore, any debt payments are likely to be applied first and "only after that's been repaid will further repayments be applied to the new purchases sitting there racking up high interest debt".
Such statements come as Mr Clitheroe reveals that as the nation has a total outstanding credit card debt of $33 billion, many people are facing an uphill struggle in getting their finances under control.
A Money-AU.com article recently claimed that although a 0% balance transfer deal can be an effective way to get finances under control, borrowers seeking such a product should remember that they will be charged a fee for doing so.