MAKE THE RIGHT 0 PERCENT BALANCE TRANSFER DECISION

2007-03-08 10:33:40

( Financial )



Are you worried about your increasing credit card debt? Availing of a 0 percent balance transfer offer from another card company can help you save a lot on interest payments and fees. There are a lot of balance transfer cards to choose from, but you have to decide carefully and find the best balance transfer offer for you.

Choosing the best balance transfer offer.

Read the fine print - Most credit card companies offer low interest balance transfer or 0 percent balance transfer promotions for a set period of time, usually from six months to a year. Make sure you know when the offer expires and what rates you will be paying after the promo period has ended.

Be aware of any fees hidden in the balance transfer offer - It is best if you can find an offer that has no balance transfer fee involved. Pay attention to the penalties the company places, as many of these low-rate cards contain very severe payments to compensate for the low interest balance transfer offer.

Transferring your balance

Once you've made a decision, continue to manage your payments wisely to make the most out of the 0 percent balance transfer offer.

Remember to close off all your other credit lines - you might encounter the temptation to use your old credit card, since you've freed up credit on them. Resist them, or else you might have more debt than when you started.

Pay on time - Late payments incur severe penalties. Pay your monthly fees late even once and your 0 percent balance transfer rate might disappear for good.

Pay more than just the minimum amount - Regardless of how many 0 interest balance transfers you make, you must work at reducing the principal of your credit card debt. Paying the minimum amount won't do this, they simply reduce your accrued interest.

Be careful in making new purchases on your balance transfer cards - Some companies charge higher interest on new purchases on your balance transfer cards. If possible, bring your credit card debt close to zero before making purchases on your new card. Limit purchases to emergencies and to what you can pay off in a month.

Making the most out of your 0 percent balance transfer

The balance transfer offer might help you solve your financial worries for the meantime. However, you should not use credit cards and 0 percent balance transfers as a long-term strategy. Limit your purchases and live practically. Consciously decide to keep your finances healthy by avoiding incurring another heavy credit card debt on your new card. 0 percent balance transfer offers are opportunities to improve your financial standing that you should not let go to waste.


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