The honeymoon is over, the 0% interest rate was good while it lasted and now the APR has kicked in on your credit card. Time to move to another 0% offer? Clever customers have been using the credit card offers for a while to reduce their interest payments to nothing and to pay off loans more quickly. By being smart a credit card customer can have the advantage of 0% credit for as long as they have an outstanding debt. But before you applaud this "beating the system" approach though, be warned: card jumping too frequently can seriously affect your credit rating, and the companies are wising up quickly to the practice. The simple answer is yes; it does affect your credit rating if you overwork the system. The common belief is that those who build up debt on their credit cards are the most likely to be rejected for further credit and consequently have a poor credit rating. In fact the banks and credit card lenders love these customers because the interest they pay swells the profits of the company. Lenders rely on interest charges to stay in business. Those who pay off their balance in full or make full use of 0% deals don't make any money for the credit card companies. It doesn't seem fair, but this is, after all, a business and the credit card companies are not there for any altruistic reason; they're in business to make money and maintain a stable financial market for all customers, not just those card-sharp enough to play the system. A credit rating has all the appearances of secretive whisperings between banks and credit card companies, but the truth is you can take control of your credit rating and improve the chances of being accepted for credit. By applying to the three credit agencies, you can (for a small charge) receive a detailed copy of your credit report. This will detail your financial history and give you the same information that the banks and credit lenders hold on you. This information can be inaccurate, so it's a worthwhile exercise to carry out just in case there are mistakes or errors that are directly affecting your credit rating. That rating can be directly affected by instances of multiple card jumps, so be prudent how you use the opportunities to transfer balances between lenders. Many of the market leaders have more than one product on offer so multiple applications have a very good chance of being rejected. The lender isn't stupid - they will realise what someone who sends out multiple applications is trying to do. The chances are that person knows their credit rating may be poor and is probing the market, trying to find a lender that will let them slip through the net. A cluster of rejections on a credit history could send your credit rating through the floor, minimising any chance you had of cashing in on any 0% offers. This 'Black data' is added to your credit report for all the other lenders to see and you're left in the cold with no chance of transferring balances between tempting offers. How you run your financial affairs leaves a paper trail that can be easily followed by lenders back to a history that categorises you as a poor investment for the credit card companies. If you are going to transfer balances between cards, pick one that suits all your requirements and concentrate on that application, rather than attempting a scattergun approach. The general opinion is that the best policy to minimise the accusations of being a card jumper is to choose a card with a longer introductory offer period. Some cards give you as much as 16 months interest free credit on credit card balance transfers, but check the small print. These offers do carry a credit card balance transfer charge, sometimes up to 3% of the amount but that initial outlay may be well worthwhile for the amount of interest you will save. Staying with a card lender for longer generally boosts your customer loyalty rating, improving your overall credit score. It also gives you more of a breathing space to pay off a larger amount of the outstanding balance before you have to think about switching cards again. The golden rule is to make sure you don't use that card for anything except the balance transfer, as payments made will go to pay off the most recent debt first rather than your outstanding balance. Juggling your finances to take advantage of 0% transfer offers between credit cards is a difficult (but not impossible) balancing act of reducing your costs whilst maintaining a good credit rating. If you abuse the system, it will catch up with you in the form of a poor credit rating and rejection letters. But if you use the system carefully and sensibly, you can benefit by cutting your payments and your debt considerably. There are plenty of very good offers for credit card balance transfers to 0% cards available. Check the comparison sites, as these offers are updated regularly with that latest offers.
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