The Art of the Tart

I never thought I'd see the day when being called a tart was a compliment but here we are! However, I urge you to push any images of red lipstick and cheap perfume out of your thoughts; I'm referring to rate tarts and not the other slightly less respectable variety! The art of the tart is to play credit cards so that they work in a way that is financially beneficial for you and is a very respectable pastime thank you very much.

The tarting game works whether you're new to credit or are an old hand at running up credit card bills and is largely possible thanks to the competition between rival banks for your loyal custom. However, if there were ever a set of rules for tarting the first would be that loyalty doesn't pay.

As part of this rivalry, credit card providers invented the balance transfer and associated it with 0% offers as an incentive for people to switch their outstanding and then hopefully pay lots of lovely interest when the initial offer expires - tarting is all about playing the banks at their own game. If you currently have an active balance on your credit card that you are unable to pay off in full each month you should seriously think about becoming a rate tart. Here's how.....

Where to start with tarting

Sit down and write a list of all your outstanding debts and the associated APR's charged. To make tarting beneficial you need to move your outstanding balances to a card that charges a substantially lower rate of interest. At the moment there are a huge number of cards offering interest free balance transfers lasting up to a year or beyond these are obviously an ideal place to start. You should pick a credit card with the longest 0% interest period possible as this provides the most economical means of tarting.

Once you have applied and been accepted for your replacement card, you must transfer your existing balances to the new 0% card as soon as possible as most providers limit this window of opportunity.

During the interest free period you will still need to make repayments as the 0% refers to the fact that no interest is charged or accumulated not the fact that you don't have to make any payments at all. However, all repayments do go directly towards reducing your outstanding debt; this is of course the main benefit of tarting as it provides you with a viable opportunity to completely clear the amount you owe.

Becoming a fully fledged rate tart

Unless you manage to clear your debts during the initial 0% offer, you should begin to look for a new credit card offering a similar 0% deal roughly 6 weeks before your existing offer expires. Make sure you leave plenty of time to apply as credit card applications generally take longer than expected and once the 0% offer runs out you'll be charged the card's standard APR and undoing all of your good tarting work. You should continue to do this until you have cleared all of your existing balances and are completely debt free.

In essence, tarting is moving from one 0% introductory rate to another. While this can still be very worthwhile, sadly it is not as profitable as it once was. This is because lenders have cottoned onto the fact that people aren't keen to stick around after introductory offers expire and so have begun to charge a handling fee for each transfer, these tends to be a certain percentage of the total amount transferred.