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Switching credit cards has been an all too common practice for consumers. But there are several tips to take note of when switching credit cards that consumers can use to leverage even greater savings than normal.
Transferring your charge card balance to another more attractive charge card offer can be an effective tactic in the charge card debt consolidation process.
Due to the hundreds of debt victims in America, various charge card companies are rabidly competing for your attention in the hopes that you will utilize their products and services. In fact, many charge card companies will actually pay you to transfer your charge card balance to them in hopes of getting your business!
Of course, a person who is struggling with debt will immediately search for other charge cards that offer a zero percent or otherwise low introductory rate. Since the demands of credit card debt consolidation are high, however, there are plenty of balance transfer charge cards to choose from. For this reason, searching for the appropriate credit card transfer plan may take a little work.
The Basics of Balance Transfer Cards
A balance transfers credit card works like any other card. The difference lies only in two important things – the lower APR and the fees associated with transferring the balance. By taking advantage of these differences, if you have several charge cards all with current balances, you can use a balance transfer card to consolidate all of your debt on just a single balance transfer credit card. When this happens, your old credit card balances will stop accumulating interest. The only obligation left for you is to make sure to pay the new credit card monthly. In the best case scenario, you will have the balance transfer credit card paid off before the special 0% APR promo period is over.
The Best credit card Transfer Plan
A typical charge card company offers zero or low intro rates for credit card balance transfers for new customers. These rates usually last for only 6 to 12 months, however, then up goes your apr.
Some charge card companies offer cards that allow the low introductory rate to be extended by simply making regular purchases with the new card. Yet other credit cards offer low-rate balance transfers through the life of the plan until the balance is paid off in full.
Since there are so many different types of balance transfer plans available, it is important to never settle for the first balance transfer deal that comes your way. Look around for charge cards that you qualify for, that can provide the lowest interest rate possible, that have the longest promo period, and that have the fewest extra fees and conditions.
Sometimes, important information that you need to make your decision is found only in the small print of charge card agreements and applications. So, be sure to read all of the information thoroughly because it may save you hundreds of dollars. If you fail to read the fine print, you might discover that your credit card debt actually gets worse!
How to Make the Balance Transfer Work
In order to get the most from your balance transfer, you need the self-discipline necessary to change your attitude towards spending and your management of monthly bills. If you can’t change your lifestyle, the charge card balance transfer may put you in more debt than you started with. Rather than allow this to happen, take advantage of the credit card balance transfer in order to pay your debt off quickly – and don’t keep adding to your debt. Or, set the money you save from your interest free loan for an emergency fund to use rather than your credit card if an emergency does arise.
For the balance transfer to work, you may need to cut up your old charge cards in order to reduce temptations of using them. Assess your spending habits to determine if this is necessary for you.
Switching to Low-rate credit cards
Before transferring your old charge card(s) to a new company, confirm that the issuer of the new card will be offering lower rates once you switch to them. If possible, request that the card waive all transfer fees and negotiate a fixed rate for your transferred balance. In many cases, this step is not necessary because several cards already offer special promotional offers to new customers.
Once the issuer agrees to your demands, you will discover that the same monthly payment actually reduces your debt more because you aren’t paying toward finance fees. As a result, you will be able to eliminate your debt sooner than expected.
If you are unable to negotiate a lower rate, shop around and apply for a new low rate credit card. Remember to avoid several applications for credit in short periods since, however, this can ultimately hurt your credit rating.
For anyone in a great deal of charge card debt, balance transfer credit cards can be a fast and convenient method for consolidating debt. Always remember, however, that balance transfer charge cards carry a fixed time limit or the “low-interest introductory period.” Therefore, it is important to read the fine print carefully in order to know just how long the intro period will last. In doing so, you won’t get caught back up in paying finance charges on high interest rates or returning to your vicious debt cycle.
In my research I have found that Chase credit cards and Discover credit cards have the best balance transfer credit card options.
Tags: balance transfer, credit card balance, credit card balance transfer, debt transfer, transfer credit card balance
Posted in Finances · April 19th, 2010 · Comments (0)
Before I can tell you how to utilize balance transfer credit cards, I feel that it is very important that I explain exactly what a balance transfer credit card is. Balance transfer credit card accounts are credit cards that allow you to use them to pay off other charge card accounts with a much lower apr. These charge cards usually come with a very low introductory rate. An introductory interest rate is one that will last a shor period of time, usually somewhere between 6 months to a year. Also, balance transfer charge cards are usually only for people with good or excellent credit. With less than perfect credit, it is extremely hard to find a balance transfer credit card.
When looking for a balance transfer credit card, it is important that you look at a couple different aspects and weigh the good and bads of each credit card. Here are the things you want to figure out:
1. What is the introductory interest rate? – This is a very important question to ask when looking for the best balance transfer charge card. If you are able to pay off the balance within the introductory period, you want to know what you are going to pay during this time. Most balance transfer credit card accounts come with a 0% introductory rate however, some of these credit cards will have a 2.9% or a 5.9% introductory rate.
2. What is the transaction fee for the balance transfer? – This is also important. In the past, balance transfer credit cards didn’t have fees. Well, unfortunately with the economy being so horrible, this is no longer the case. Actually as of about 6 months ago, I havn’t seen a balance transfer credit card that didn’t have a transaction fee. However, even with the transaction fees, it may still be in your best interest to transfer balances to save some cash. If you find a balance transfer credit card with a fee that is less than 5% you are actually doing well. As a matter of fact, Discover card is running promotions between 3% and 4% fees. This is definately something that you may want to take advantage of. Actually it is an awesome offer because it comes with a 0% intro interest rate.
3. What is the ongoing apr? – This has to be the most important aspect in looking for a balance transfer charge card. The ongoing interest rate is the interest rate that you will pay after the promotional period. You don’t want to transfer money from one charge card to another if the ongoing interest rate is going to be higher than what you are already paying. Yes I understand that 0% introductory interest rate looks great but, if you can not pay the debt in full within the promotional period, you are going to end up putting yourself in a worse position than you were in before.
If this is all too much to take in or you need help with another subject, feel free to contact Jem Credit Cards. They are the leader in providing first class customer service whil offing the best credit cards and debt advise around. You can contact them:
*By phone – (561) 355-0069
*By email – Support@JemCreditCards.com
*On the web – www.JemCreditCards.com
Tags: balance transfer, Credit, credit card, credit cards, money
Posted in Credit · March 10th, 2010 · Comments (0)