People find payday loan offers quite attractive when there are discounts and rebates offered on purchases or other transactions. They compare the websites online and decide to choose the best option available. They also find credit card deals with cash back offers. If we compare credit cards with payday loans, there is some difference with the type of credit one has to choose from.
Credit card companies aggressively advertise the discounts and other schemes. One can find credit card deals in transfer of balances. If we compare credit cards, we can find various options on transferring balances from one credit card to another.
Credit card holders can always take up these lucrative offers of balance transfer cards from one credit card to another, as offered by credit card companies. The credit card companies apply various marketing means to encourage credit card holders to transfer their debt from existing credit card to another credit card. As part of the attraction, the credit card companies would offer either an interest-free period or free transfer depending upon many factors such as the total amount of credit card debt, repayment capacity of the credit card holder etc.
There are often advertisements that promise 0% interest on balance transfer cards. However, it is important not to be taken away immediately by such aggressive campaigning of the balance transfer credit card offers. It is often advised that the credit card holders should carefully read the fine print of such advertisements before deciding to transfer the balance amounts. The 0% interest is offered on balance transfers for a fixed period of time.
Suppose a person has a debt of US $1000 in one credit card and he is repaying it at an interest of 18%. Then he sees an advertisement from another credit card company that allows balance transfer of credit card debt to the new credit card on 0% interest basis. But this 0% interest basis would be fixed for a certain period of time, say, six or nine months.
After this period expires, the person has to pay the interest as fixed by the payday loan company, such as this one http://www.pay-dayloans.com.au. But what usually happens is that the person transfers the balance amount to a new loan, but fails to repay the entire amount during the interest-free period. Once the period expires, the cash loans statement starts inflating every month.
Credit card companies sometimes charge high interest rate after the expiry of the interest-free period, perhaps higher than what the person was paying in the previous credit card. Also, many people do not give serious attention to this part and they keep taking the balance transfer cards very lightly until they receive the credit card bills with high repayments. Sometimes, they also fail to make regular payments to the credit card companies on time and end up with the credit card companies charging higher rate of interest.
Credit card holders should be very careful about the interest-free period. If handled carefully, this period can be very beneficial for them. They can pay the entire debt without any interest.