How do credit card balance transfers
works? Credit card issuers came up with a strategy where one
could transfer their existing balance from one credit card to another.
In the process one was able to swap from a high interest rate to a low
one.
A grace period is provided where they charge far less
on the transferred balance. This literally saves the customer hundreds
of dollars in interest charges. The super low introductory rates
usually last between 6-12 months. Due to fierce competition, it is not
hard to find the best balance transfer credit card rates of 0% for upto
9 months.
Balance transfer are an excellent
strategy of reducing credit card debt. You are free to pay down the
balance on the card without incurring high interest on the card. With
this method you could open a new account that offers a balance transfer
when the old one expires. You then transfer all of the balance to the
new credit card to start a new grace period of low or 0 finance
charges. Just note that if you plan to do a balance transfer, remember
to close the old accounts as quickly as possible because having more
than two credit cards could dent your credit rating.
Even some the best credit card balance transfer
have their own disadvantages which we would like
to share with you. Transferring a balance appears very attractive, but
be sure to obtain all the necessary information before making a
decision. You need to ensure that you really understand the different
rates of interest charged for balance transfers, purchases done and
cash withdrawals made and what these revert to if they are based on
introductory offers.
You also need to fully comprehend in what order the
new provider will pay off debt, as some use payments to clear balance
transfers first which usually incur lower interest rates. This could potentially
mean that credit card purchases, which incur high interest rates, are
not cleared until the balance transfer is paid back.
Other important questions that need to answered
include:-
- How long does the introductory rate last?
- What's the card APR after the introductory rate
expires?
- Are there any late fees and over-the-limit fees
charged?
- What about balance-transfer fees? Will you incur a
charge when you transfer your balance? For example, if an issuer
charges you a transaction fee of 4%, on a $5,000 balance, that would
cost you an extra 200 bucks!
Once the the balance transfer is complete, you new
card company may contact you to inform you of the change. Don't
just take their word for it. Call the old card company to verify this.
For reference, just in case something goes wrong in
the future, please write the name of the person you've talked to, the
date and what was discussed. Wait until the old credit card company
sends you a billing statement showing a zero balance
and if they don't, call and request for one. Then cut up the old card
into half cause you don't need it any more.
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BALANCE TRANSFER CREDIT CARDS - CHEAP
& 0 TRANSFER CARDS