As you know, the UK is now officially in recession. The cost of borrowing has increased while the interest rates on savings has dropped through the floor to the extent where the single incentive to have your money in a bank is so the thieves and burglars can’t get their hands on it.
With this in mind, it is overtly tempting to take advantage of the 0% interest rates on balance transfers on cards that are being offered at the moment. It seems to make more sense than ever to have your debt sitting on a 0% card rather than paying over the odds for a loan.
The trouble with this is everyone is doing it. People far and wide are racking up debt on these cards and have been for the last few years, knowing they can transfer it over to another 0% card at the end of the interest free period. This tactic is called being a “card tart”.
As with all things in life, when things looks too good to be true they usually are. As people, organisations and banks tighten the money-belt in 2009 they will want to make sure they are earning off the back of these people. This may lead to the credit card companies cracking down on the card tarts and trying to get them paying interest.
Whether this happens by the banks removing these offers, or whether it comes from them detecting the card tarts and declining credit card applications is unknown, but as things get more gloomy in the UK it is worth keeping in mind that although it is still worthwhile taking advantage of the 0% offers, do not rely on them still being there when the interest period is over.
Ride the wave while it is there, but get ready to jump off when you need to.
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