Mommy Katie: Smart Balance Transfer Credit Card Tips that Work (Guest Post)

Friday, June 14, 2013

Smart Balance Transfer Credit Card Tips that Work (Guest Post)

Getting into credit card debt is easy, but getting out of it is hard. Credit cards have their own perks and pitfalls, so using them responsibly is really important. However, if you fail to do so then you will have to take measures to finish off your debt so that you don’t fall deeper. Balance transfer credit cards can help you big time in getting rid of your credit card debt without losing your mind.
Using a balance transfer credit card you can consolidate your debt from a high interest card to a zero percent or low interest one. There are many financial providers that give you a 0% introductory interest rate so that you can pay off a good amount of your debt without worrying about interest add up. Many of them also offer rewards that are worth it.

#1: Avoid Mysterious, Unclear 0% Periods
When it comes to balance transfer credit cards, the best of them give the same 0% interest period to all of the approved applicants. However, some of the providers out there are not clear about the interest free period they claim to give. In such a case, the credit card that you receive in your mail could have a 0% period that is much less than what you were promised. It’s better to stay away from these providers who mention in fine print that their the interest-free period will depend on your credit score. Choose a company that provides the same interest free period to everyone.

#2: Don’t Let Balance Transfer Fees Deter You
All of the reputed credit card firms out there offer zero or low interest rates happen to charge a balance transfer fee. This fee could be the area of 2 to 5 percent on the amount you’re looking out to transfer. You will save on interest during the interest free period you get from the card, which means that the upfront cost doesn’t really matter and is worth it.

#3: Compare Offers with an Open Mind
Before you start to compare credit cards and their offers, first go ahead and determine how much time you’ll need to clear off your debt. Let’s say you owe an X amount and plan to pay at least a Y amount of money each month, and you need 10 months of interest free time to finish off the debt completely without interest. So if you find a card that has a higher interest free but a longer interest free period then you should go for it, since you will get the needed time to clear your debt. The only thing that you need to keep in mind when comparing offers is the purpose of balance transfer, which is to buy you time so that you can pay off your debt before the interest starts accumulating.
After, you may compare balance transfer credit cards on NerdWallet - look for offers that directly correlate with your lifestyle for optimal satisfaction.

#4: Keep Old Accounts Active
If you don’t want your credit score to be negatively affected then don’t close off your existing cards all of a sudden. This not only gives the creditors false info that you have maxed out your credit limit, but it also boosts your credit utilization ratio while shortening your history. It makes total sense to keep the old accounts up and running, so that you’re able to clear off your debts without having your credit score affected.

These are smart tips to transfer balances between credit cards. What's your experience with balance transferring? Sound off in the comments!



1 comments:

hannah said...

The most important thing to keep in mind when doing a balance transfer is making sure you can pay it off in time.
Don't transfer 1000 to a 0% card if you can't pay it off before the 0% period ends. Come up with an amount each month that you can keep up with, and then calculate the total transferred amount from that.
Keep in mind that a lot of balance transfer cards say in tiny print that if it is not paid off in full by the end of the 0% period, you'll be charged ALL the back interest, as if it had been an interest card the whole time.So pay very close attention for that!