Forget switching and relax with a long-term credit card...

Many people reading this website are keen to get the best deal in every circumstance. It’s natural to want your money to work hard for you, and that often means being a so-called ‘rate tart’, constantly moving your money around to ensure you are always beating the banks.

Loyalty is for losers according to many rate tarts, and good for them. If we all sat back and took what the banks dished out to us, the financial services market would be a far less competitive place than it is now.

But thankfully we are not all the same and plenty of borrowers don’t want to chase their tail constantly for the best rates. Some would call these people ‘lazy’, since they have neither the time nor the inclination to ensure they are always taking advantage of the best deals, whether on their credit card, savings, mortgages or anything else.

But they would argue they simply don’t want to dedicate much of their time to finding the absolute best deal, although they still want good value. Some people just have better things to do than to keep abreast of new credit card launches and diarise their optimum switching dates.

It takes all sorts of course, and I’ll be the first to say that while those who don't switch are certainly not lazy, serial rate tarts definitely do have a life!

But if you are in the camp that wants good long-term value without needing to switch, there’s some great news on the credit card front.

Cheap and easy
Barclaycard Platinum Simplicity Visa is a credit card that is designed for those who want one low rate that they can hang on to for some time. And that low rate has just got lower with the provider announcing it has reduced its APR from 7.8% to 6.8%. We have also heard reports from lovemoney.com readers that it is relatively easy to get accepted for this card, compared to other cards.


Rachel Robson takes a look at why you might be better off using a low interest credit card.
But hang on, aren’t there plenty of credit cards around that charge 0% interest. Why would you want to pay any interest at all, even if it is low?

The reason is that the 0% credit card offers, available for balance transfers, new purchases or sometimes both, are short-term deals, usually available for around a year. They are absolutely brilliant for many borrowers and extremely popular. But they do not suit everyone, and long-term low rate cards can be a better option for some.

Who doesn’t suit a 0% APR card?
If you are the sort of borrower who doesn’t want to keep chasing rates a 0% balance transfer or purchase deal will be all well and good until the initial 0% rate runs out.

Then you will revert to the lender’s APR which will typically be around 17%. If you still have a hefty balance on your credit card you will start to incur large interest charges, which could spiral quickly if you can only afford to pay the minimum required repayment each month.

It’s also worth remembering that, although you may have every intention of switching to another 0% deal at the end of your introductory period, what you forget, or worse, there are fewer 0% deals around to switch to? The number of 0% balance transfer deals has dwindled in the last year and is expected to fall further.

Related goal

Pay off credit card debts
How to destroy your credit card debt quickly and effectively.

Do this goalPlus, with card companies lending criteria especially strict in the current environment, you might find that your applications are not accepted, leaving you stuck on your lender’s expensive APR. No one is suggesting that there will be no 0% cards at all in a year’s time, but realistically your choice will be more limited, which is not great if you don’t have a squeaky clean credit record for example.

It’s also worth knowing that you are only able to switch a balance over to a card provided by a different issuer, and many brands actually come from the same issuer -- Virgin and MBNA, two of the best providers for introductory deals, for example are both issued by MBNA so you cannot move balance from one to the other. This could limit your switching choices further.

Benefits of a long-term low rate
Frankly, a long-term low rate card allows you to get off the credit card merry-go-round and stop worrying about switching cards. When you get 10 months into a deal you won’t have to start looking for another deal. You can just relax and work on repaying your debt.

Remember, every 0% balance transfer deal comes with a one-off balance transfer fee anyway, so if you switch every year you will still end up paying something, even if it’s not strictly interest. If you know your debt will take a few years to pay off, a long-term credit card could be perfect.

Also, if you have a large purchase to make and you are considering a loan, a low rate credit card could be a much cheaper alternative, especially if the amount you want to borrow is less than £10,000 (loans tend to get cheaper above this level, although the low-rate credit cards still pip them!)

I think long-term low rate credit cards are a useful alternative for those people with a fair old sum to transfer, or a chunky purchase to make, who don’t want to keep on switching. They offer the chance to forget about finding the best deal or fretting over where you can shunt your money to next. Whether or not that’s lazy doesn’t matter, it sounds like a good option to me