Unstable economic situation makes it easy to run up high balances. Paying off your credit card debt at double digit interest rates can be difficult. Fortunately, balance transfer credit cards offer a safe harbor from high APR. They let you move your debt from a high interest credit card to a less-costly plastic. Thus you can save money on interest charges and pay off your debt sooner. Our tips will help you to avoid mistakes and fatten your savings.
Most balance transfer credit cards come with zero interest rates. However, it is just a promotional offer provided by credit companies to snag new customers. Typically, zero rates last up to 12 months, but you can find special offers which come with an introductory period of 15 months. Afterwards the APR will rise. If you transfer your credit card balance to a zero APR credit card, try to pay off your debt in full within the interest-free period.
If your budget doesn't allow you to eliminate your balance before the introductory period expires, then look for a credit card that provides moderate interest rates afterwards. For example, you can find balance transfer credit cards that come with 0% introductory rate and 7.5% APR afterwards. If you plan to leave your balance on the card, 7.5% interest will not be the end of the world.
Take care to make all payments on time and not to exceed your credit card limit. If you don't adhere to the rules, your beneficial zero APR deal can be revoked and you will have to pay default interested rates.
Nowadays nearly all credit companies charge a fee for balance transfers. So read all credit card terms and conditions to find out what balance transfer fee you will need to pay. It can be a flat rate, for example $30, or a percentage of the amount you will transfer - from 1% to 3%. The first variant can be more beneficial if your credit card balance is high.
Zero percent interest rate on balance transfers doesn't mean 0% APR on purchases. Even though you can find credit cards which come with 0% interest rates on both balance transfers and purchases, these are the exception rather than the rule. So check what APR you will be charged on purchases. If it is high, take another plastic to go on a shopping spree or vacations.
If you have a debt, it doesn't mean that your plastic should not be beneficial. So don't apply for the first plastic that catches your attention. Balance transfer credit card offers can differ in their features. Don't hurry: compare all perks and benefits they provide. There are various offers with moderate fees, high credit limits and attractive rewards programs. Depending on whether you want to get cash back, significant gas discounts or free hotel stays, you can select the plastic that suits you best. However, keep in mind that the balance transfers that you make don't qualify for the credit card rewards.
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