Balance transfer borrowers 'should remember negative hierarchy'

Although opting for a 0% balance credit card deal can be an effective way for consumers to get to grips with their finances, borrowers opting such a move should endeavour to make sure they are aware of negative payment hierarchy.

In a Money-AU.com article, Aussies considering this kind of credit card deal were advised that they "should not expect to be able to make payments to their higher interest debt" first.

Consequently, checking whether or not a card issuer has such a policy was advised before taking out such a deal.

One way borrowers were advised to do this was to select separate credit cards from different providers, one for the purposes of new purchasing and the other for carrying 0% or low interest rate balances.

Those searching for a balance transfer deal were also advised they should not expect to be able to continually switch their debts as lenders "tend to take negative views" of those consistently owing large sums of money.

Earlier this month, the publication pointed out balance transfer customers who are late or end up missing a payment could find their credit card provider imposes "punitive costs" on them.

Written by Ashley King