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What to Look for in a Balance Transfer
Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Balance Transfer Cards and other Financial Planning topics.
Should I just look for a low balance transfer rate?
What to Look for in a Balance Transfer
If you have credit card balances sitting in high-interest credit card accounts, you might find the thought of a balance transfer extremely tempting. After all, you could take advantage of low or no interest for several months after a balance transfer, and that could give you enough breathing room to really make an impact on paying off the debt.
But a balance transfer is actually about more than just the interest rate you're charged. There are many other factors you should consider when doing your credit card comparison.
- Triggers. What events on the credit cards you're considering could trigger an increase in your interest rate? Make sure an accidental late payment isn't enough to raise the rate you're working so hard to get.
- How much does the transfer cost? There's always a balance transfer fee involved and that fee is usually tacked onto your credit card balance. When you do your credit card comparison, be sure to choose the lowest fee and interest rate combination.
- Terms. Be sure you get familiar with the terms of the transfer. Can you afford the minimum monthly payments? Do you agree with the late fee policy? Are there any terms that you don't think you can live by?
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