We are all feeling short of cash at the moment. 0 balance transfer credit cards can help enormously. If you owe a large amount of money on your credit card or cards it can feel as though you will never pay them off. A 0% card may well get you through until things improve.
With credit card companies looking to maximise their profits many people with a large debt on their card are finding their interest rates are being increased. These cards are offered by many card companies and are a great way to get control of your debt.
What is a balance transfer?
Put simply it is what happens when you pay off debt on your old cards with your new one.
* Say you have 2 cards a and b owing $2000 on each.
* You get a 0% balance transfer card c.
* You ask c to transfer the debt from a and b to c
* C pays off a and b and your debt is now on c at a low rate!
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All across the United States, consumers who are smart with their finances are taking advantage of zero percent credit card offers, and for good reason. By signing up for a 0% intro APR credit card deal, consumers with credit card debt and a good credit score can literally pay no interest on their lingering credit card debt for 12 months or more.
Here are some important things to remember when taking advantage of zero percent intro APR offers:
1. Many credit card companies will offer you an interest free period as a way of introducing you to their credit card. It is very important that you know and understand what the interest rate will be once that free period is over. If you are forced to pay a significantly higher interest rate after the free period you will likely wind up with a much worse deal than you had intended. If at all possible try to pay off your total credit card balance before the interest free period comes to an end. Try to find a balance transfer deal that gives you at least 6 months 0% introductory APR so that you don’t wind up making balance transfers too often.
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We’ve all heard the warnings: never give out your personal information over the phone or Internet unless you want someone to steal your identity. Even the most official-looking e-mails branded with corporate logos can be a front for phishers – crooks who want to make off with your credit card information and more. But sometimes you have to take extra steps to protect your identity. Here are some tips to keep you safe.
Leave Your Credit Cards at Home
When you don’t need your credit cards, leave them at home in a safe place along with your Social Security card and other important documents. This will not only curb the temptation to make impulse purchases, it will also keep your finances secure in the event that your wallet or purse is lost or stolen.
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Transferring a high interest credit card balance to one with a better interest rate and/or better overall terms and features is usually a good way to reduce the amount of money you pay back on your existing debt. Depending on the “better” credit card you select, you may also be able to benefit from a rewards program or gain other features you didn’t already have – including travel accident insurance coverage or an extended warranty program for new purchases made with the card. There are a few instances when a balance transfer is not the great deal it appears at first glance though, so it’s important to do your research before moving your accounts around.
If you want to take advantage of a balance transfer offer, use this guide for a smooth transition from one card to the other, and avoid costly or time consuming mistakes:
Step One: Find a better credit card with a balance transfer offer.
There is no point moving money from one credit card to another unless you are going to benefit from it in some way. Sometimes people are mislead by the introductory rates and promotional offers – so it is important that you dig a little beneath the surface to see what sort of rates you’ll be charged once the promotional period ends.
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Transferring balances with high interest rates to a credit card with a lower interest rate (or a 0% interest balance transfer offer) is a great way to pay your debt off faster and save money in the process. It’s not as cut and dry as transferring the money from one place to another though, there are some other considerations to work out before you rush into the next balance transfer offer you qualify for: primarily, how does a balance transfer affect your credit score?
Balance Transfers and Credit Scores – What’s the Connection?
Due to the formula used to calculate an individual’s credit score, moving money from one credit card to another can actually cause some negative issues with your credit score that you may not have even realized.
Credit scores are calculated with a top-secret formula, but we do know how much weight each component of our credit carries in the calculation:
# Payment History – 35%
# Outstanding Debt – 30%
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Paying off credit card debt with 0% interest is a dream come true – which is exactly why a large number of credit card companies offer the promotions. They know it will attract new customers who have debt with other credit card companies to transfer that debt to their cards. But where is the value to the company offer the credit card balance transfer offer; if they let you repay that debt with 0% interest?
Whenever you see credit card promotions that sound like they’re going to be a good deal for you, it’s best to look into them closely and make sure you read all of the “fine print”. A 0% balance transfer is typically good for a specific length of time, six months or twelve months are the most common terms. If you have several thousand dollars of debt on a higher interest credit card and take advantage of a 0% balance transfer offer for twelve months, the credit card company is betting on you still having a balance once the promotional period ends. When the six or twelve months of no interest repayments end, the balance will start being repaid with interest.
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Tis’ the season for credit card offers! In particular, it seems that from November through February marks an increase in marketing from credit cards you already have- particularly if you haven’t been using them in awhile. Credit card companies spend quite a bit of money on marketing to attract new customers-and it’s always cheaper to keep customers they have rather than trying to find new customers.
What you may find waiting for you in your mailbox is a balance transfer offer from one of the credit cards you already have. The very best balance transfer offers are in the form of checks that offer 0% interest, but there are a number of other offers you might receive with 3.99% interest or 6% interest and no balance transfer fees. All of these offers may actually offer you a good deal depending on what you decide to do with them.
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That offer to transfer your credit card balances sounds like a pretty good deal, doesn’t it? And it is, until you take out your magnifying glass and start reading all the fine print that goes along with the offer. What a lot of people don’t realize is that the lender making such an unbelievable offer wouldn’t be doing so if there wasn’t some way to benefit financially. These lenders actually feel safe in assuming that most people transferring balances won’t pay attention to the potentially costly details that accompany the offer.
Transferring balances from a high-interest rate credit card to one with no or a lower interest rate can save you a substantial amount of money if you don’t fall victim to these common mistakes.
1. Balance transfer fees
Rare is the balance transfer offer that doesn’t come with some sort of balance transfer fee. It might be a flat rate like $50 or $75 but it’s usually a percentage of the total amount of each balance transferred. Maybe 3% doesn’t sound like much but if you’re transferring several thousands of dollars, that fee can be hundreds of dollars!
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Are you staring at that attractive advertisement for switching credit card companies by transferring your balance from one card to another? While many of these offers are truly great deals, balance transfers and card-switching is not something to jump into, eager as you may be. You need to do your homework first: Do enough research and investigating in order to determine whether it in fact is worth it or a good idea to make the transfer.
First, find out if it is in fact worth it. Generally speaking, these attractive advertisements and super credit card deals advertise very low introductory rates if you transfer your current balance from an existing credit card onto this new one. You can stumble upon these offers anywhere—online, in the mail, on a flyer or via a telephone call from credit card company salespersons—and you need to determine how great these deals really are, or if you’ll just end up paying much more in fees and interest in the long run.
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With U.S. credit card debt at an all time high, many savvy consumers and investors are renewing their commitments to rid themselves of this burdensome and in most cases, unnecessary debt. In doing so they are constantly searching for the next best credit card with higher credit limits, lower annual percentage rates (APRs), and zero balance transfer offers. In fact switching credit cards has become as common as changing the battery in the fire alarm for some people and it has actually worked. So if you are amongst the thousands of Americans who are thinking of making a switch to improve your financial picture, before you do there are a few things that you should consider. They include how multiple inquiries for credit will affect your credit score and if the APR that applies to balance transfers after the introductory grace period still makes it a good deal. In addition to these two things you should also, as with everything you do, conduct your own research to find the best solution to meet your needs.
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