How interesting is 0% interest for 14 (or more) months?

I was looking for something else entirely when I fell across a Virgin credit card advertisement. It was all about transferring an existing balance from another card and it was offering 0% interest for 14 months. There was a 2.98% transfer fee (minimum £3.00) and a balance transfer limit of 95%.

I immediately became very curious about 0% interest rates at that point, because it struck me - actually not for the first time! - how very useful this loophole in the credit system could be to a determined and disciplined debtor.

I went to 'Credit Cards on Google' where one can compare credit cards with a 0% introductory balance transfer and their purchase rates. Purchase rates are much the same for all of them - but only Virgin was offering 0% for 12 months on purchases, as well as 0% interest for 14 months.

APRs differed widely - but determined and disciplined debtors would not be interested in APRs, because they would not be interested in making any purchases or incurring any interest at all.

Taking advantage of 0% offers like this - always supposing you are accepted, of course! - is a very good way of getting rid of credit card debt. IF!

• You don't use the new card, but simply use the time available to pay off as much of the outstanding balance as you can.
• You shift the remaining balance to a new 0% lender directly prior to the end of the interest free period - and then don't use that card either, but simply continue to pay off the then outstanding balance.
• You go on moving the diminishing balance to fresh 0% per cent lenders, until no balance remains.

One can actually go on transferring diminishing balances to interest-free lenders - paying, of course, diminishing transfer fees for the privilege - almost world without end, because 'interest free for a given period' credit cards are not new phenomena, and are not likely to disappear any time soon.

The good news is that by working this system one can end up with a valid credit card and excellent credit record at the end of the day. IF - and only IF - one never uses any of the the cards until one has a nil balance.

Playing this system is worth a thought - if you have the good sense and fortitude to cut up and render the lovely, tempting, new cards useless the instant they fall through your letter box...

Geoff - http://www.metlissbarfield.com/