The 'Other' Kind of Balance Transfer : Lifetime Deals

Balance transfers have been a hugely popular feature of credit cards for a number of years now, and millions of people have taken advantage of 0% introductory deals to shift their debt from one card to another and enjoy an interest free period of up to 15 months.

Granted, the introduction of balance transfer fees a few years ago somewhat dampened the enthusiasm of so-called 'card tarts', but the 0% deals remain popular and can still be highly effective in saving you some cash.

There is however another type of balance transfer which is perhaps not as widely known about or used: the lifetime transfer deal.

Fixed Low Interest

With a lifetime transfer, the interest rate you pay on your balance will be fixed at a low level for the entire life of your debt. While you'll pay more than the 0% offered by other deals, you won't have to start searching for a new deal when the introductory period is up - the rate is fixed until the debt is cleared.

A typical lifetime rate will be around 5%, which is a good deal cheaper than most personal loans or overdrafts, and so is a relatively cheap way to service debts that you've built up - providing of course that you're able to make at least the minimum repayments required and preferably more than that.

Advantages of a Lifetime Deal

So why choose a lifetime rate over a 0% deal? Firstly, even though introductory periods have been getting longer and longer, there's no escaping the fact that you'll need to apply for a new card at some point if you want to avoid a sudden and huge leap in interest when the period is over. There are only so many card issuers out there, and as most balance transfer deals only apply to new customers, many people are finding that their options are getting limited when it comes to finding a new 0% deal.

There's also the consideration that current economic conditions mean that card companies are getting more picky about which applications they approve, and so successfully applying for a new card is getting harder and harder.

Although not as cheap as 0% cards, lifetime balance transfer deals offer a way of locking in a low rate over the long term, giving you chance to start repaying your debt without the punishing levels of interest found on most standard credit cards.