Visa balance transfer: Using it Right

2007-03-08 10:33:40

( Financial )



LOWER INTEREST RATES

Credit card companies have been coming up with so many programs to attract clients. One of the more popular of these programs is the balance transfer card which allows you to close out your existing credit card by availing of a new one.

A balance transfer card like a Visa balance transfer attracts clients by offering a lower interest rate than the one you are currently paying on your present credit card. When you avail of a Visa balance transfer card, the bank or financial institution issuing the new card will then close your present card dues by settling all your outstanding balance. You will then be left paying your new debt under the Visa balance transfer card.

THE BATTLE PLAN

What makes a balance transfer card attractive is that it gives you the chance to restructure your financial obligations, and make the terms a little bit more favorable in your behalf. By availing of a new credit card plan with lower interest rates, you are able to save because you are paying lower monthly amortizations.

Of course taking a new loan to pay for an old one can become a vicious cycle if you are not careful with your finances. This is also true with any loan, as it is with any balance transfer card. Whether you avail of a Visa balance transfer card or any transfer cards for that matter, make sure that you can pay off on the principal and not just the minimum payment that is being required every month.

Because you save with the lower interest rates on your Visa balance transfer card, you can use that savings and chip off on your the principal credit card loan. By doing this, you can keep lowering your monthly payments, until one day, you credit card loan has all been paid for.


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