Home > Credit Cards > How To Proceed With Caution Into A Balance Transfer
How To Proceed With Caution Into A Balance Transfer |
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As the globe witnesses economic slump, people look for ways to cut down on their monthly expenses and in that many are busy transferring a credit card balance to a card with a lower interest rate. There is no dearth of credit cards in the market. But before finalizing on a credit card, a sensible consumer should do some homework. Do some close reading and calculations before giving it a go. A little bit of patience and searching can win you a good bargain. Several major credit card issuers are offering rock-bottom introductory rates on balance transfers. For example, the Chase Platinum MasterCard comes with 0% introductory rates on balance transfers for six months, while the AT&T Universal Card boasts 0% percent introductory rates on balance transfers for nine months. You need to be an ideal card customer to enjoy these kinds of low promotional rates. Read between these attractive offers and go for the best interest rates. In the credit card business, some card dealers reward you for transferring balances at super low introductory rates on new card purchases. For example, the American Express Blue Card charges no interest on new purchases for 15 months. At large, you'll be charged a fixed annual percentage rate of 9.99%, 10.99%, 12.99% or 14.99% (depending on your credit value). The rate lasts until those balances are paid off. Other issuers that promise to hold steady on balance transfer rates include Bank of America. The particular bank offers an 8.9% fixed APR on transferred balances and the same for new purchases for six months, which is worth a try. Bringing Over Your Balance Finding a good card may be the first step, but maintaining the actual balance transfer process is key in credit card transactions. It's important to continue to make minimum payments on your old card while waiting for a balance transfer to take effect. It takes a month almost to happen. Another golden rule: Close off old credit lines. Otherwise, you may be tempted to charge away on your old cards. They may transfer a large balance to a card with a low rate on balance transfers but continue to use the old one. Soon, both cards have large balances on them. It's also important to realize that not everyone qualifies for the rock-bottom interest rate promised in big bold print. There is tail piece attached in the end and that is often missed by our eyes, but is an important adage. Even though the offer might say 1.9% interest rate on balance transfers, you may qualify for a 10.99% rate. Be Cautious Analyze these low-rate card deals closely as they might sound attractive, but the penalties on these low-rate cards are often severe; some companies charge a "transaction fee" for the privilege of transferring a balance to their card. Several issuers offering low rates on balance transfer charge fees of 3%-5% when you accept their offer. |
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