We show you how easy it is to get a lifetime low-rate loan from a credit card that is cheaper than most mortgages.
Usually, borrowing on a credit card is a daft thing to do, simply because standard interest rates are so high.Earlier today, I analysed the interest rates of 319 different credit cards, in order to establish just how wide the range really is. The monthly interest rates charged range from 0.38% to 2.21%, which equates to annual interest rates of between 4.7% APR and 30% APR. However, the card with the lowest rate -- Co-operative Bank's Gold Base Rate card -- charges an annual fee of £120, bumping up its overall charge to 8.9% APR, which is still very competitive.Overall, the average monthly interest rate across all these cards comes to 1.19%, or an annual rate of 15.3% APR. Given that the Bank of England's Monetary Policy Committee left its base rate on hold at 4.5% a year when it met yesterday, this means that most credit cards charge a margin of more than ten percentage points over the base rate. What's more, fifteen cards (including the above-mentioned Co-op card) charge annual fees of between £10 and £275. What a delightfully easy way to make money!Anyway, given that standard interest rates on credit cards are so high, it clearly pays to avoid them! So, if you don't pay off your balances in full each and every month, why pay double-digit interest rates on your plastic debt?If you're prepared to be a rate tart, you can transfer your debt between a string of 0% credit cards, surfing from one piece of plastic to another every, say, six to nine months. However, life as a card tart is far from easy, as there are numerous traps waiting to catch you out. As I explained in Conquering The Card Tarts, balance-transfer fees, low credit limits and being rejected by card issuers all await the unwary 0% player. Hence, only disciplined and financially aware cardholders should go down this route!Nevertheless, there is an easy -- even effortless -- way to slash the interest rate charged on your debt. All you need to do is to transfer your debt to a lifetime balance transfer card, which charges an ultra-low rate for as long as it takes you to pay off your balance. Simply shift as much of your debt as you can to one of these beauties and then set up a Direct Debit or standing order for your minimum monthly repayment.Once you've done this, you can sit back and relax, knowing that you're paying one of the lowest interest rates available anywhere. However, you must heed the following warning: never, ever make purchases, withdraw cash, or go shopping with a lifetime-transfer credit card. If you do, these transactions will attract interest at standard interest rates, putting you right back to square one. (If you want to spend without paying interest for up to ten months, check out these great 0% on purchases cards.)So, for low transfer rates with no hassle, check out the following Best Buys:Card Lifetimebalance-transfer rate(% per year)TypicalAPR (%) MinimumincomeAmex Platinum4.98.9£20,000British Airways Amex4.919.9£12,000Lloyds TSB Advance* 5.511.9NoneAmex Nectar5.912.9£12,000Morgan Stanley Platinum5.915.9None listedFinally, each card has a limited window of opportunity for transfers: with Amex cards, transfers must be made in the first six months; with Lloyds TSB, six weeks; with Morgan Stanley, by 1 June 2006. Also, the Lloyds TSB card includes a balance-transfer fee of 2% (minimum £2.50), which bumps up its cost.It really is as easy as that, so what are you waiting for? Go on: demolish your interest rate today!More: View our delightful 0% deals | Check your history in our Credit Report centre!