Credit Card Balance Transfer
Need to Know Credit Card Balance Transfer
In 2008 Americans paid more than $412 billion dollars in finance charges to the credit card companies. If you contributed to this astronomical amount, you might be considering a 0% interest of credit card balance transfer to knock down those monthly payments.
Credit Card Balance Transfer
Credit Card Balance Transfer Fees.
Many balance transfers can cost you a charge of 3% to 5% of your balance. Although many cards will cap this charge at around $50 to $100, some do not, and your charge could very well negate your savings from the lower interest rate.
Universal Default Clause.
This policy is practiced by many credit card companies and you need to be aware of it. Under this policy if the cardholder is late on any of their bills, cell phone, electric, car, what have you, the credit card company can instantly take away the promotional interest rate and charge a higher rate.
The Fine Print.
Many zero % interest offers are only given to candidates who qualify, namely those with a clean credit history. Be careful when applying under these terms as you might not qualify for the zero % interest but instead end up with an even higher interest rate.
Additional Purchases.
Find out if new purchases qualify for the zero% interest as this will have important ramifications. If new purchases do fall under the 0% interest then you can rest easy.
It is important to note that the credit card balance transfer fee usually counts as a new purchase. But do not be discouraged, balance transfers are a powerful fiscal tool, if used properly.
Destroy The Old Card.
Destroy The New Card. If your main goal is to pay down the balance, cut the new card as well and you will not have to worry about interest charges on new purchases. Simply pay down your debt at zero interest.
Pay all of your bills (phone, auto, mortgage, etc.) on time and you will retain your zero % interest.
Call The Credit Card Company. When your promotional rate comes to an end, before transferring to another card, call your credit card company and tell them you are going to transfer your balance if they cannot give you a low interest rate.
You may want to learn about Prepaid Credit Cards here.
