As the name suggests, these cards offer a low lifetime rate to enable you to pay off your credit card balance over a longer period of time. They won’t enable you to escape interest payments altogether, but they can offer you a long-term low-rate alternative.

The cards work on the premise that your willingness to pay interest on your balance until it is cleared is rewarded by being charged less for that balance in the long-run.

What are the advantages?

One of the biggest advantages is that many of these cards can offer you a better rate than an unsecured loan.

Also, transferring to one means that you won’t have to keep finding a new credit card every 6-12 months because the introductory offer of your current card has ended. Instead you can stick with the same card, long-term, with the same low rates until your debt is cleared. This also eliminates the risk of finding yourself having to then pay a significant amount of interest at the card’s standard APR, if you forget to switch at the end of a low-rate deal.

This kind of card is a good option if you have a lot of debt that has been accumulating for a while, or if you have been in the habit of transferring your balance every time a 0% introductory offer ends. They can also help you save by being a much cheaper alternative to the standard APR offered by most cards.

Lifetime balance transfer cards are a hassle-free alternative to cards with attractive but short-term introductory offers because you won’t have to keep switching your balance to a new card every time that offer ends. Instead you can spread the clearing of your debt over several years at one of the lowest interest rates on the market.

It’s also worth bearing in mind that the majority of 0% deals are not as economical as they used to be; most now charge a handling fee of around 3%, increasing their cost in the long run.

In addition, switching to one of these deals is not as easy as previously was the case; with tightening credit controls you might find it more difficult to switch now.

What are the drawbacks?

Although the cards are known for ‘lifetime’ balance transfer rates, these do not always last for the entire lifetime of the balance. Often the rate offered lasts for about five years on the balance transferred; but this may well be enough time for you to clear your debts. Make sure that you familiarise yourself with the terms and conditions of the balance transfer offer so that you know exactly how long you have to pay off the debt.

Instead of making the minimum repayments, which will mean still accumulating a significant amount of interest, try to make arrangements to clear the debt as soon as possible. If you are in a position to do this you’ll save much more money than if you only pay off a little at a time.

You should also check the terms and conditions of your low-rate balance transfer card to see if there is any time limit imposed on how long you have, after opening the account, to transfer your credit card balance over. Some providers give you less then 60 days to transfer after opening, so be careful you don’t get caught out.

Some providers have also begun charging a handling fee for transferring your balance over, but there are still others out there who offer fee-free deals; so make sure to hunt these down if you want to save the most money.

It’s advisable not to use these cards for everyday spending. The low rates will apply for the balance that you transfer across, but not to any additional purchases you then make, so you’ll find yourself having to pay the standard significant amount of interest on any subsequent purchases.

Also, this new debt won’t be cleared until the ‘cheaper’ debts have been repaid. You’re unlikely to find a card that offers you a 0% purchases bonus on a lifetime balance transfer, so you should limit the function of this card to simply clearing the balance you first transfer across.

Who Does It Best Suit

Lifetime balance transfer cards are ideally suited to those wishing to spread the cost of paying off a larger debt over a longer period of time than most cards offer, at lower rates. They might fit your financial circumstances well if you don’t want the bother of having to switch around various 0% deals.

If you know you can have the discipline not to spend any more on this card, they can be a good practical option; but to get the most from them, make sure to hunt around for the lowest fixed interest rate offer available.