Low Rate Credit Card Balance Transfer

If you’re a responsible cardholder who needs a little help getting back on the right track, a credit card that offers a life-of-balance transfer can not only eliminate excessive interest but also realign your credit score.

Most financial organizations offer credit cards with a low promotional interest rate on balance transfers. But while these special rates usually expire 6 or 12 months after you open the new card, some cards make these special transfer rates permanent. If you qualify for a life-of-balance transfer, take advantage of it!

Life-of-balance transfer interest rates are often lower than normal credit card rates, varying from an amazing 0 percent to 9 or 10 percent, which is still much lower than traditional interest, which can be as high as 30 percent. If you have a balance on another credit card that’s gathering 20 percent interest each month, why not move it to a card with half that? The savings will quickly add up. Plus, which a lifetime rate guarantee, you can take your time paying off the transferred balance (though, as always, it’s best to pay as much as you can as quickly as you can).

However, be sure you do your homework before you jump in. For example, some cards only guarantee the life-of-balance transfer rate if you also use the card regularly for purchases, say twice or three times a month. This way, the company can offer a great deal but can still squeeze some interest payments out of you, the customer. However, read the fine print – the company may not specify exactly how much those purchases must be; buying two or three packs of gum each month might be enough to ensure you keep your premium transfer rate. But keep in mind, other cards will yank away your low interest rate if you DO make purchases with your card. Be sure you read the fine print!

Also, realize that what you’re initially offered might not be what you’re ultimately approved for. The envelope you get in the mail may promise a $10,000 transfer limit at 3 percent interest, but if your credit score is low or your history is short, the specifics of your contract will vary. Always call the company and ask them to explain the specifics of the plan.

As mentioned before, make sure you’re diligent and consistent with payments. Your special 3 percent rate could be hiked to 30 percent automatically if you miss even one payment.

Low Rate Credit Card Balance Transfer

Filled with the insights of numerous experienced contributors, Structured Products and Related Credit Derivatives takes a detailed look at the various aspects of structured assets and credit derivatives. Written over a period spanning the greatest bull market in structured products history to arguably its most challenging period, this reliable resource will help you identify the opportunities and mitigate the risks in this complex financial market.

From the Inside Flap

While legitimate concerns have recently surfaced with regard to structured products and their markets, the fact is that close to ninety-five percent of structured products have proven themselves to be stable credit quality securities with upgrade/downgrade ratios equal to or better than the corporate bond market.

Beyond the generally high quality of these investments, structured finance has played a critical role in improving the efficiency, liquidity, and availability of capital in both the United States and abroad, and allowed for the distribution of risk to a wider variety of financial institutions than could otherwise be achieved through traditional balance sheet lending.

Brian Lancaster, Glenn Schultz, and Frank Fabozzi know what it takes to make it in this dynamic environment, and now, with the help of numerous experienced contributors, they take a detailed look at the various aspects of structured assets and credit derivatives.

Divided into five comprehensive sections, Structured Products and Related Credit Derivatives opens with an engaging introduction of this field and quickly moves on to:

• Provide an analysis of one of the most controversial topics in the entire structured products market: structured finance operating companies (SFOCs)

• Examine various consumer asset-backed securities (ABS), from residential and auto to small business and student loans

• Offer valuable insights into one of the most misunderstood areas of structured products—collateralized debt obligations (CDOs) and their many forms

• Cover the commercial real estate sector through in-depth discussions of CMBS, commercial real estate CDOs, and much more

• Explore commercial ABS issues such as aircraft securitization, intermodal equipment, and life insurance reserve securitization

Written over a period spanning the greatest bull market in structured products history to arguably its most challenging period, this reliable resource will help serious investors identify the opportunities and mitigate the risks in this complex financial market.

BRIAN P. LANCASTER is Head of Structured Products Research at Wachovia. Prior to joining Wachovia, Lancaster was a managing director (principal) in structured products at Bear, Stearns & Co. Inc. from 1990 to 2001.

GLENN M. SCHULTZ, MBA, is Managing Director and Head of ABS and Non-Agency Mortgage Research for Wachovia Capital Markets, LLC. Prior to joining Wachovia, Schultz was a managing director and head of residential ABS investment banking, managing the residential ABS and MBS businesses of the Royal Bank of Canada Financial Group.

FRANK J. FABOZZI, PhD, CFA, is Professor in the Practice of Finance and Becton Fellow at Yale University’s School of Management and the Editor of the Journal of Portfolio Management.

From the Back Cover

Structured products and Related credit derivatives

With new structured asset products continuously being introduced to today’s markets, it’s important for experienced and aspiring investors to understand the essential aspects of these financial instruments. Structured Products and Related Credit Derivatives can help you achieve this goal.

Filled with the in-depth insights and expert advice of numerous experienced contributors—and edited by financial professionals Brian Lancaster, Glenn Schultz, and Frank Fabozzi—Structured Products and Related Credit Derivatives puts this complex field in perspective.

Divided into five comprehensive sections, this informative guide:

• Provides an accessible account of the different types of asset-backed securities (ABS), including residential, auto, and ABS credit derivatives

• Addresses issues in the collateralized debt obligations (CDO) market through discussions of CDO equity, middle market CDOs, and commercial real estate

• Examines commercial ABS components such as aircraft securitization, intermodal equipment, and life insurance reserve securitization

• And much more

With the world of structured products and credit derivatives constantly evolving, you need to have a firm understanding of how to effectively operate in such a dynamic environment. The information found throughout these pages will help you do this, and much more, as you go about your everyday investment endeavors.

About the AuthorBrian P. Lancaster is Head of Structured Products Research at Wachovia. Prior to joining Wachovia, Lancaster was a managing director (principal) in structured products at Bear, Stearns & Co. Inc. from 1990 to 2001.

Glenn M. Schultz, MBA, is Managing Director and Head of ABS and Non-Agency Mortgage Research for Wachovia Capital Markets, LLC. Prior to joining Wachovia, Schultz was a managing director and head of residential ABS investment banking, managing the residential ABS and MBS businesses of the royal bank of Canada Financial Group.

Frank J. Fabozzi, PHD, CFA, is Professor in the Practice of Finance and Becton Fellow at Yale University’s School of Management and the Editor of the Journal of Portfolio Management.