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Posts Tagged ‘Balance Transfer’

The balance transfer credit card is one of the starkest examples of how competition benefits the end consumer. Consumers with good credit and high credit card usage can use balance transfer credit card to save dollars from a few hundred to much more depending on their credit card usage and the amount of balance transfer.

In simple terms, if you have good credit, companies are looking to provide the offer, even if they do so at a lower rate of interest. You benefit from low interest and they acquire a valuable customer. So, a balance transfer credit card enables you to transfer your existing balance or even debt to a credit card with low or no interest.

Credit Card Balance Transfers Math

A look at the math of a credit card balance transfer will make the situation clearer. For instance, suppose you apply for balance transfer credit card from a reputed online vendor. Now, your interest on credit card debt runs up to, say $1450 dollars a year at an average with your credit card that has an APR of 10.99% assuming you have a good credit rating. Now the competing credit card company offers you a credit card with a 0% introductory APR for the first 12 months. By making a simple balance transfer to your new credit card, you save on one year’s credit card interest.  Now that is math that one can live with!

Shopping Guide To Balance Transfer Credit Cards

Initially consider the size of the balance transfers to be made, and correspondingly the amount of financial gain that follows.  The period of 0% APR is important, how much credit do you expect to use, and correspondingly how much interest will you save from credit card balance transfers during the offer.
Do the balance transfers incur a transaction fee and if so how much?  Consider how long the introductory APR lasts and the APR after that in your calculations.  And, as always, be sure to read the fine print. You don’t want to encounter unexpected costs. The best offer sometimes is not the one with the lowest rate of interest.

Balance Transfer Trivia

The best type of balance transfer credit cards are the ones with a 0% rate of interest. Many companies have begun offering such cards, at an incredible introductory period of up to one year. It is possible to transfer your debt to a credit card with a 0% APR, and then retransfer it to another one at the end of the introductory APR period on the existing card. However this is not a recommended action as it can result in a lower credit rating for you. Credit card balance transfers can be done online; most companies offer this system of balance transfer.

Credit Card Balance Transfers In A Nutshell

Substantial savings can result if you get you balance transfer credit card arithmetic right.  Before applying for one look, be sure to look at the fine print.  Good financial sense with credit card balance transfers can make for good finances. If you have spent substantially utilizing “plastic” money, a balance transfer credit card just might make good financial sense for you.

A credit card balance transfer is not right for everyone. Just like most of the options in the world of finance there are some definite benefits to getting your own balance transfer credit card as well as some pretty significant downsides. The key to success with any kind of balance transfer or any other financial product or service is to first learn all that you can about that particular subject before you can understand how to use it to your advantage.  Never jump into getting a balance transfer credit card without all the facts, this is where so many people end up in hot water, they leap before they look and when it comes to money that is always a bad combination. 
The benefits of a balance transfer are great in many cases. For example who doesn’t want to be able to switch the balance from one credit card with high interest to one with no interest at all? That is exactly what you can do when you have a new credit card that is still enjoying its interest free period. Of course if you do not have one of these you may simply want to perform the credit card balance transfer in order to enjoy a lower interest rate. This can save you thousands of dollars a year if you are looking at a significant amount of credit card debt. 
There is a growing movement of consumers who are getting credit card after credit card so that they can constantly perform balance transfers. This is easy to do as all you need is to make sure that you are approved for a new credit card when the interest free period of your old one runs out, ensuring that you can simply perform a credit card balance transfer to the new card and once again enjoy paying no interest. Sounds easy, right? 
This kind of balance transfer is straightforward and anyone can do it if they have a halfway decent credit rating. And if you can control your spending habits it might even be a good idea as the balance transfer credit cards will allow you a nice amount of breathing room and the time you need to start paying off the principle rather than just the interest on your loan. If on the other hand, you are like most people and you find it hard to not spend money when you can, then a credit card balance transfer is probably not the best solution for you. 
There is nothing more difficult than curbing spending. If you have the available space on your credit card, are you going to be able to say no to those wonderful jeans you saw in the store window? What about that fantastic stereo you just saw the other day? Can you resist them? You must be able to if you want to use this technique of avoiding interest with credit card balance transfers. If you are in doubt then find another way!  
More and more balance transfer credit cards are hitting the market today because the industry is recognizing what a powerful tool balance transfers can be for consumers. Everyone wants to save some money and the sad fact is that it can be very difficult, especially since having credit cards makes it so easy to spend more than we actually have.  A credit card, especially a balance transfer credit card, can be a powerful weapon in your financial management toolbox; you just need to know your limits and your weaknesses. That is the only way to avoid trouble with balance transfers. 
A credit card balance transfer could be your saving grace; then again perhaps it is the wrong solution for you. The only way that you can be sure is to learn all you can about the credit card balance transfer process and all of its pros and cons.

Nowadays, credit cards offer many features designed to appeal to everyone — from cash back and rebate offers to point systems and frequent flyer miles. Many of these offers work to your advantage only if you make large and frequent purchase. On the same hand, you get more in return if you can pay off the balance each month. Otherwise, the annual fees and high interest rates typically found on these types of cards will make the rewards seem worthless. But what about the credit card holders who always carry a balance or can’t seem to get out from under the tight grip of debt? Balance transfer credit cards might be a temporary solution to your problem.
Are You Drowning In Debt?
Many Americans have several credit cards and are in debt up to their eyeballs. It is easy to fall prey to the trap set by creditors. Credit card companies and banks make it tempting to spend beyond your means, overextending yourself to the point of no return. Gaining control of your debt can be difficult. And, if you can only afford minimum payments on your accounts that barely puts a dent in the total amount you owe. It can take years (or decades) to get that card paid off. Plus, you’ll end losing hundreds and thousands of extra money in finance charges.
But don’t fret! Balance transfers can pull you out from under and have you back on track or debt free.
Grab Hold Of The Lifesaver
If you’re finances are a little out of control but you’ve managed to maintain good credit then you’re in luck. Grab a hold of the floatation device and see the light again. You don’t have to let revolving credit rule you. Turn the tables and take control of it – benefit from the use of a credit card balance transfer.
Credit card balance transfer terms can vary greatly so it’s in your best interest to shop around for the best deal. Many balance transfer cards offer 0% APR on all balance transfers. Some have higher introductory rates from 2% to 9% APR or more.
Balance transfer interest rates usually apply for a limited time. This could be 3 months, 6 months, 9 months or 12 months. Some cards (rare cards) even offer transfer rates for an unlimited number of months. Once the time period has ended, the normal interest rate is applied. This can be anywhere from approximately 9% APR to as high as 30% APR.
Getting Your Head Above Water
Some may compare the use of balance transfers to “robbing Peter to pay Paul.” In other words, you shift your money around from one place to another trying to avoid the consequences of poor money management. It may seem like you are handling your situation, when in reality you are not. However, when used carefully, a credit card balance transfer from high interest cards to balance transfer credit cards can give you more breathing room and time to get caught up. 
Balance transfer credit cards offer many options, particular for consumers who always carry a balance on their credit or who may be in over the heads with credit card debt. These cards can help you use a credit card balance transfer to get out from under hold of plastic and back in control of your finances. If you’re stuck with high interest rates and realize how much money you are losing than balance transfer credit cards are for you. Just be sure not to let the dangerous snare of the plastic monster get a hold of you again.