Save Money With A Balance Transfer Credit Card
It is estimated that about a third of people fail to pay off
their credit or store card balances in full every month, and
therefore pay interest on the balance If that applies to you,
the chances are you could save money by applying for a new
credit card which offers zero (or low) interest balance
transfers
The way this works is that you take out a new credit card
offering such a deal and immediately ask them to pay off the
debt on your old card The balance on your old card then becomes
zero, and the entire balance goes on to your new card instead,
with its zero or low interest rate
A number of card issuers offer these deals Zero rate offers
typically last from five to twelve months If you are confident
that you can pay off the entire balance during this time, they
are a good choice for saving money
If you think it may take longer to pay off the outstanding
balance, a better option may be to apply for a card which offers
a low rate for the entire life of the balance (ie until it is
repaid) American Express™ offers a fixed, low APR for the life
of the balance with its Platinum card
If you are currently paying interest on a balance with your
current card, it makes sense to transfer your existing store or
credit card balance to another provider There are a few points
to watch out for, however
1 Check if there is a charge for balance transfers
Balance transfer fees are becoming more common as credit card
issuers try to recover some of the money they lose by offering
interest-free periods Fees range up to 2% of the total balance
However, there are still several card providers offering free
balance transfers
2 Remember to pay off your balance every month
Even though the card issuer offers an interest-free period, you
will still have to make the minimum monthly payments by the
monthly due date, or you will be charged interest
3 Avoid spending extra on the card used for the transfer
Most credit cards pay off balance transfers preferentially, so
if you incur any other debts on the card, they will not be
discharged until the entire transferred balance is paid off
That means any new spending will be “trapped” on the card,
accruing full interest charges If you are using your new card
to service a balance transfer, therefore, do NOT use it for
additional spending as well – use another card instead
4 Switch again when the introductory period expires
If you have failed to pay off the balance completely once the 0%
introductory rate for balance transfers expires, you could apply
for another card and transfer your balance again However, if
you plan to do this you should always remember, in the month the
0% deal ends, to move the debt again to another 0% offer This
means you will need to apply for another card about six weeks
before the introductory period ends You will need to be well
organized and remind yourself to do this
5 Note that your credit rating may suffer
If you apply for a number of credit cards, especially at the
same time, your applications will be noted by the credit
reference agencies, and your credit score may suffer The most
important preventative measure is to spread card applications
out Do this and most people with reasonable income and no bad
debts will be fine, though be aware that there will be a small
risk to your ability to get competitive credit in future
Having decided on the type of balance transfer deal you are
looking for, do take the time to study the market and see what
is available Do not simply fill in and return the next credit
card application form that arrives in the mail Credit card
comparison sites such as
com can make this easier for you by listing all current
card offers for you to choose from, and also have a range of
articles offering unbiased advice and information
Tags | card, credit, express, issuers, money, period, providers, rate, result, transfer, transfers
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