It was a long time ago on a planet really nearby… Secretly, in the shadows, there has been a battle going on, a battle between the lone wolf ‘card tarts’ and the armies of the credit card companies. A card tart (also occasionally referred to as a rates tart) in case you didn’t know is a person who applies for a credit card and works up a healthy balance. Then realising that the repayments are getting a bit steep makes a credit card balance transfer onto a card offering a 0% transfer free period, now averaging around 10 months. The problem is that after the period ends they want to transfer again and again and again. Ad infinitum! In other words they wielded their 0% cards in front of them, like a light-sabre, keeping the forces of interest oppression at bay.

People often change their existing credit card balance to a new credit card for two reasons. Firstly the interest on your existing card may have got too high and now your repayments are hardly touching the amount you owe. Secondly you have seen an excellent 0% credit card balance transfer offer on another card and want to take advantage of it. 0% balance transfer periods mean what it says on the tin; you do not pay any interest on the amount that you owe. The length of time that the transferred balance remains free varies but the average has now hit around 10 months.

A sign that credit cards were beginning to wise up came along in 2004 when a major credit card company introduced credit card balance transfer fees. Nowadays these fees are around 3% of the balance you want to transfer; transfer 1000 and you will be charge 30. The fee was introduced because it was estimated that switching cards was costing credit card companies up to 1 billion a year in administration costs and other financial losses. With that kind of money disappearing into the ether credit card companies simply couldn’t afford not to do something. Unfortunately (or fortunately depending on which side of the fence you’re on) this didn’t seem to stop anyone.

This is all fine and good you say but what on earth is a credit rating, history, or score? Well, they are all the same thing. Rating and score a bit misleading, although in common usage, as they imply a figure i.e. so and so has a credit rating of 6.4, imagining that it is similar to the scoring systems in say ice skating championships. This isn’t the case. History is a better term as it is in fact a vast document detailing all associated credit related action. It includes your name and address, culled from the electoral roll, cards you have applied for, whether you were accepted or declined, credit limits given and so on. It also details repayments you have made and, more importantly to credit companies, missed.

Of importance here is the fact that the credit referencing agencies record cards that you apply for. If a bank notices that you have been changing cards over and over they may well decline your application. This is becoming more common. Of course, if you have an excellent credit history, not just of payment but of mature credit usage as well, then you will probably be accepted no matter what. Basically the trick is to use the card a bit as well as simply transferring your balance. In other words try and make it look as if you haven’t just transferred for the interest free period – give the card company a little something back.