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."
Balance transfers, the financial expert asserts, are particularly useful for those with credit cards charging interest of 15 per cent or more.
Aussies looking towards using such a credit card deal, however, were advised to ensure they clear as much debt as possible during the course of the introductory period as upon its expiry the amount of interest they will be charged could be "very high".
These credit card users, he said, could easily find themselves "back where they first started, facing insurmountable, high interest debt".
Mr Clitheroe also warns against going on to make purchases on balance transferred credit cards as doing so is likely to see them be charged a higher amount of interest than that attached to the sum.
Furthermore, debt payments are usually 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".
Mr Clitheroe revealed that as the nation has an $33 billion outstanding credit card debt, many are struggling to keep their finances in order.
Meanwhile, a Money-AU.com article recently said that while 0% balance transfer credit cards are an effective tool for clearing debt without accumulating further interest to the balance, many are not aware of the transfer fee involved, usually around 3% of the balance moved across.
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