The Benefits of Balance Transfers

by Michael Benifez

Debt, credit cards, and interest rates seem to be a major topic of the time as fees for just about everything continue to climb. While it is difficult to get ahead when your paycheck is going to only stretch so far, there are a few things you can learn about managing your debts, payments, and how you can use balance transfer cards for your own benefits.

Playing the credit card game

The credit card companies are there to make money so you as the consumer have to learn to read the fine print and not pay more than what you are bargaining for. Many credit cards have introductory rates, which can be as low as 0% interest. But if you were to read the fine print, it sometimes can say for ninety days only or perhaps for six months only. If you are going to use the balance transfer cards to lower your debt and to get a head of the amount of money that you owe on credit cards you should be looking for longer terms.

What to look for

There are balance transfer cards that have an interest rate that is a little higher, such as 2.9 or 4.1 percent interest but those interest rates are going to be the same for the life of the balance transfer. This is going to be a better option than zero percent interest for ninety days.

What else to look for when using balance transfer cards?

When you are considering paying off one card and transferring the balance to another card you should look for penalties. Sometimes if you are to pay off one line of credit early or transfer it to another card before a certain set date you may find that you owe a percentage as a penalty fee.

Other problems that can occur when you are using balance transfer cards include late charges, and changes of the interest rates when you miss a payment or if you are late in making a payment. For example, if you have a 2.9 percent interest rate, but you forgot to make a payment, your interest rate then may be forfeited and jump to 18% interest or whatever is written in that fine print on the pages you signed when transferring the balances. It is always important to make payments on time to avoid all types’ penalties such as $39 for a late fee or it could be even more than that on some cards.

Introductory rates are just what the words say. During the introductory time, which could be 30 days, 60 days or even six months, you are given a special rate. If you don’t pay off the balances transferred during that time you are going to pay a different interest rate after that.

Look for zero percent interest for the life of the balance transfers without transfer fees and you could have a great ‘deal’ that is going to help you get out of debt faster. Balance transfer cards are a financial tool that is going to get you paying down your debts, and paying off those things you purchased weeks or months ago.

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