Is a balance transfer credit card your ticket out of credit
card debt? It can be. If you're having trouble paying off a
steep balance and the high interest that goes with it, a
balance transfer credit card could be the right solution
for you. But before filling out an application, take a few
factors into consideration. Educate yourself on the balance
transfer process, and you'll get the most out of your
credit card experience.
What Balance Transfer Credit Cards Are
Balance transfer credit cards have a certain appeal that
separates them from other forms of plastic. They offer
applicants the chance to shift a balance from a
high-interest card to a low-interest one. In fact, most
balance transfer cards come with an initial 0% interest
period. This means you can make payments that are directly
applied toward the balance. As you pay down the debt, you
can save hundreds of dollars on interest expense.
How to Compare Balance Transfer Credit Cards
Many balance transfer credit cards appear to be the same,
but in reality they vary quite a bit. Check the following
details as you sift through the options:
Length of introductory period – The initial period of no
interest may be as short as three months, or as long as
fifteen months. If you aim for at least 12 months of 0%
interest, you'll have ample time to pay off the balance.
What the 0% APR applies to – Some balance transfer credit
cards offer you 0% APR only on the balance. This means that
you will be charged a higher interest rate when you make a
purchase. Moreover, all the payments you send in will first
be applied to the balance, and then to the purchases. While
you pay down the balance, the new purchases and their
attached high interest rates will sit and accrue on your
statements. Eventually, you could pay more in high interest
than you planned on. To avoid this, look for a card that
offers 0% APR on both balances and purchases. Or limit the
use of your card until you pay off the transferred balance.
Check the fees – Most balance transfer credit cards charge
an initial fee for bringing over the new balance. This is
sometimes a certain percentage of the balance amount. Banks
often include a cap, such as $50 or $75, on the balance
transfer fee. The savings you receive on interest usually
outweighs this expense.
Additional benefits – While balance transfer cards offer
you a chance to pay off nagging debt, many come with other
features as well. Some balance transfer credit cards
include a rewards program. Others have a low interest rate
that kicks in after the introductory period. Think
long-term before you apply. Consider what benefits you'll
want after you are debt-free.
Using your Balance Transfer Card
Balance transfer credit cards can be a solid solution if
they are used properly. After you have made the balance,
think about creating a payment plan to get rid of the debt.
Set aside money each month for card payments. If at all
possible, pay off the balance before the introductory
period runs out. As the balance dwindles, you'll gain
control of your finances. You'll also begin to build a
stronger credit history. When the balance is gone, you'll
be able to enjoy the card's additional benefits.
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To View Balance Transfer Credit Cards click the following
link:
http://www.credit-card-surplus.com/balancetransfer.php . Ed
Vegliante runs http://www.credit-card-surplus.com , a
directory helping consumers to compare and apply for credit
cards.
