By Joseph Kenny
Rate surfing can be a good way of reducing debt but there is a
risk. To avoid long term damage to your credit rating, it's
best to make sure you do it right.
Rate Surfing Research
First of all, start by researching the current credit card
offerings to see which one is best for your circumstances.
people opt for the 0% interest deals, as these allow them to
apply the payments the make to clearing any outstanding debt.
These deals usually last for a limited period (between three
and 12 months), so canny rate surfers will need to be on the
lookout for the next deal.
Keeping Track Of Credit Card Interest Rates
With rate surfing, it is essential to move to the next card
before the reduced interest period runs out. If you don't, you
could find yourself with hefty payments to make. If you're
surfing with many credit cards, you'll need to keep track of
the different offer expiry dates so you don't get caught
Keeping track of these dates can be as simple as writing them
down on a piece of paper.
The more technically savvy may prefer to use a spreadsheet for
this purpose. Whichever system you use, itís worth using a
calendar to keep track of the dates when you need to apply for
new cards and move money. If you have an electronic calendar,
set up automatic reminders for these dates. That means you
always know when it's time to make the next credit card
Finding cards to move to is relatively easy, as there are
several websites that offer comparisons of credit card deals.
The same sites will also show you whether the 0% credit cards
offer other incentives, such as air miles, vouchers, cash back
or charitable contributions.
Balance Transfer Fees
One factor to think about is the rate charged for the balance
transfer. With rate surfing becoming more popular, many credit
card companies are charging a one-off balance transfer fee of
approximately 2% of the sum transferred. This can soon add up
when you are transferring large sums or working with several
credit cards. There are still a few cards that do not charge
this fee, so it's worth shopping around to find one.
Organise Your Rate Surfing
Organisation is the key to successful rate surfing. For
example, it may be worth automating your credit card payments
by setting up a standing order through your bank. That way you
can be sure that your credit card bill will always be paid on
time, and there won't be any danger of damaging your credit
Rate surfing works best for those who intend to clear a debt.
Adding more money to a transferred balance will not help with
this goal. In addition, credit card companies may charge a
different interest rate on new spending. This could increase,
rather than decrease, the debt. With a bit of organization,
most people can manage to reduce their levels of debt through
About The Author: Joe Kenny writes for the UK personal finance
sites www.ukpersonalloanstore.co.uk and also