Things to Remember About Balance Transfers

Tired of your credit card debt? One of the many ways to get rid of it is through credit card balance transfer. If you’re new to this, here’s a quick lowdown: Balance transfer, as the name suggests, is simply transferring of balance from one credit card account on to another. The best thing about it is you get to transfer balances from multiple credit cards in to one single account.

Balance transfer allows you to pay off a single bill each month. This makes it relatively easier for you to get out of debt. But utilizing the advantages of balance transfer can be tricky. You must read the fine print carefully to avoid pitfalls. If not, you’ll drown deeper in debt instead of getting out of it.

Choose a good balance transfer fee.

The common fee among balance transfer providers is 4 to 5 percent. This may seem measly but if you’re balance amounts to $15000, the transfer fee is $750. Other providers charge higher and some cap additional fees to top that mandatory transfer fee. Scout around for the best rate first. You can negotiate for a lower transfer fee or at least have them deduct unnecessary add-ons.

Don’t get lured by introductory rate alone.

A 0% interest rate sounds like a good deal. It is if you use it properly. Never forget that credit card providers do every cunning way to entice consumers. So if you think 0% is meant to help you, it can be the other way around. These low rates are only ‘introductory’. Meaning they expire after a period of time. After that it’s back to the common interest rate. So look in to other aspects of balance transfers, too. What is the APR for old and new balances? What is the rate after the introductory rate period? Can you save more with the card’s set up or no?

Be diligent.

To get out of debt is to pay it off completely. No matter how low the interest rate of your balance transfer is, if you get late on payments, your debt still adds up. So be done with it by having the self-discipline and sense of responsibility to pay what you owe. And to do it more effectively, pay off your balance completely within the introductory rate period. This way you take advantage of the low interest rate of the card.