Credit surfing is now a very common practice in the United Kingdom, for one reason and one reason only – to save money. Here is some further information on credit surfing.

Credit Surfing Defined

Credit surfing is simply moving from one low rate deal on a credit card to another as soon as the first runs out. For example ‘Super Finance’ credit card has a rate of 0% for six months. Bob may take out their card, but as soon as their low rate offer runs out he may now take out a card from ‘Big Red Finance’ for their low rate six month offer. Bob is moving from deal to deal in order to get the best rate he possibly can – this is credit surfing.

Why credit surf?

Credit surfing saves money. For example, say you have a 0% introductory balance transfer rate, but it has just ended. You now have a £10,000 balance, which at 12% annual percentage rate means you are paying £1,200 per year. Now if, instead of remaining on the higher rate you now switch balances to a new credit card company, taking advantage of their 1yr 0% interest offer you will have effectively saved £1,200. This is why credit surfing is so popular.

Why companies provide these offers?

Credit card companies provide these introductory offers at a low rate in order to attract new customers. They make their profits once the introductory offer ends and the rate is increased. This is because enough people taking out the card do not ‘credit surf’ for whatever reason this may be, and remain with the credit card company on their standard rate. If everyone took advantage of credit surfing then such offers would stop being promoted as credit card companies would have no way of turning a profit by offering free credit.

Will they keep doing so?

It is though there may be a cool down on such offers, but this really depends on the trends in the marketplace. It is proven that whilst some people may switch, many are seen as ‘lazy’ and may remain with the company on their standard rate, thus making the company profit. All the while this happens, the offers will probably keep coming. However if more and more people keep switching there may be a change in he marketplace.

Follow Up Information

Credit card companies have now announced that due to credit surfing and rate tarts they have begun to lose money. This has resulted in a new charge to compensate for this, the balance transfer charge. This idea was originally initiated in the UK by Barclaycard with almost all other credit card companies following suit. In general the charge that will be imposed on you will be 2% with a capped maximum charge of £50 on the amount transferred. This may make credit surfing not as profitable as before, but still well worth the effort if you have large balances.