Maximize the Balance Transfer Advantages

By Leni Parrish on October 29, 2009

Do you find yourself too tied up with paying monthly bills for your credit cards? Would you like to have a way to minimize monthly expenses in order to have some free cash? You might be surprised that other people have the same concerns and have decided to try balance transfer offers from credit card institutions. They realize that by doing so, they can avail of a lower interest rate.

There are a lot of deals available, but choosing a good and perfect balance transfer deal may entail having to study offers and reading fine lines. Some companies offer 0% introductory rates for a few months. The catch is, you will have to pay diligently and on time, otherwise your rate will jump to at least 20%. Scary thought, isn’t it? Some deals will reward you with really low rates on new purchases you make with the new card partnered with a fixed annual percentage rate until you have paid off all balances.

Keep in mind that there will always be loopholes and fine prints that these credit card companies will not discuss with you openly when doing balance transfer. They actually earn from this hefty fee (as much as $75 or about three to five percent) they charge once you do the transfer. It is always best to scout and find a company that will charge the cheapest transfer fee. Plus, you have to keep in mind the duration of the offers. Low-rate interests you might enjoy in the first six months may cease after that period. Do not be afraid to ask questions. It is necessary for you to know, until when will the introductory price last. What is the actual APR after the offer rate expires? Will the low teaser price apply for the amount of balance transfer, new purchases only, or for both? How much is the new card’s annual fee, if any? Lastly, how much will I be charged for late fees and over limit?

Make these offers work for you and not the other way around. When you already know the answers, you will have an idea how long you can have breathing space, money-wise. When the transfer is done, remember to pay the minimum payments on your old card because the transfer does not usually happen until about four weeks. When transfers have become final, properly close your old account so you will not be tempted to use it ever again. Remember that you transferred the balance to help you, not push you further into the pit by making new debts with an old card.

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