Debt Consolidation Credit Counseling In Phoenix

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.

You can take much more control of your financial position by breaking through the mists of credit agencies and obtaining a copy of your credit report to see if card jumping has affected your rating. All three agencies in the UK will (for a small fee) send you a copy of your report so that you can see exactly what information is being held on you and, far more importantly, that it is accurate. The report will detail your financial history as well as other general information such as your address, occupation and income. If there's even one small mistake it can damage your chances of getting credit of any kind in the future. Frequent instances of card jumping could be one of the things that hold your finances back.

'Blanket applications' (applying to multiple credit cards to see if one lets you slip through the net) are unwise, as most credit card lenders have more than one product on the market. They will spot a multiple applicant a mile off and a cluster of rejections on your record doesn't do anything to improve your credit rating. The 0% lenders are particularly aware of this practice, and although they offer the opportunity to transfer a balance from one card to another openly, they are still cautious of anyone with 'Black data' included on their record, such as frequent card jumping or blanket application techniques. How you operate financially leaves a clear trail that lenders can easily follow, especially as those same lenders are tightening their criteria in the current economic climate.

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.

The 0% offers aren't there to encourage card jumping - they're designed to pull in new, long-term customers. By taking advantage of these offers you could considerably reduce your debt and avoid paying interest charges, but be warned. Doing it too often can draw the attention of the lenders and damage your credit rating. Use the offers wisely and you could improve your financial situation considerably.