Balance Transfer Cards Tips

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Can I just take the balance transfer offer with the best rate?

Reading the Fine Print

When you compare balance transfer credit cards, make sure you take the time to read the fine print before you commit to a card. There could be several traps or adverse policies stated in the fine print that you might not be eager to agree to.

Fine-Print Traps to Look For

  1. Late payments: Often, late payments can trigger huge increases in interest rates. This is only noticed when you take the time to read the fine print.
  2. Fees for cash advance: If you like to borrow cash on your credit card, be sure to scan the fine print for fees and increased interest charges on cash advances.
  3. Annual fees: Annual fees can really have an impact on how good a credit card balance transfer deal is. Make sure you read the fine print and identify any ongoing annual charges.
Remember, no matter how much you think you know about the balance transfer credit card you're considering, you could always know more. So take the time to review the fine print--you might just be surprised at what you find.

Will I get a balance transfer offer in the mail?

Credit Card Comparison

Many people sit and wait for a balance transfer credit card offer to hit their mailbox. But now, with online credit card comparison tools, you no longer have to wait for great balance transfer offers to come to you. Instead, you can take your financial future into your own hands and find great offers online while doing a credit card comparison.

The Benefits of a Credit Card Comparison
Not only can an online credit card comparison bring to light any great balance transfer offers to take advantage of, but it can also help you find credit card offers that improve your current financial standing. These cards may offer lower interest charges than your current cards, lower late payment fees, lower annual fees, and even less risk of rate increases.

But remember, you won't know about these great improvements unless you do some research and conduct your own credit card comparison. Be sure to watch for hidden fees and high balance transfer fees before you make the switch.

What good is a balance transfer?

Balance Transfers and Spending

You've probably heard many stories about people who benefited from balance transfer cards. These folks, after careful planning and research, transferred the balance of their high-interest credit cards over to a new low- or no-interest balance transfer card. They used the introductory period to double up on payments and paid off their entire balance before the interest rate increased.

Unfortunately, the follow-up to this story is often that the people then continued to use the balance transfer card to make new purchases and, in a couple of years, ended up transferring the balance to a new card and starting the cycle all over again.

When you have the opportunity to transfer your balance, be sure to use it as a reason to overhaul your spending. Begin to buy only those items you can afford to pay cash for and stop the cycle of debt so you can offer your family a more secure and fiscally responsible financial future.

How does The Credit CARD Act of 2009 affect balance transfers?

The Credit CARD Act of 2009

The Credit CARD Act of 2009 has changed the way balance transfers are handled and may actually reduce the amount of 0 interest balance transfers you see advertised.

Understanding the New Interest Rate Regulations
The Credit CARD Act of 2009 ensures that all introductory rates must be valid for at least 6 months. That means that when a credit card company offers a balance transfer introductory rate of 0%, it must be prepared to honor that rate for at least 6 months.

Understanding Payment Application
One of the ways that credit card companies made money from balance transfers was by charging regular interest on any new purchases you made on the card. They would simply apply your payment every month to the 0 interest rate transferred balance and allow interest to accrue on your new purchases. With the Credit CARD Act of 2009, this practice is forbidden. Payments that exceed the minimum now must be applied to the balance with the highest interest rate now, which means you might not accrue any interest on new charges or the transfer during the introductory rate.

While these regulations certainly make consumer wallets safer, they may result in fewer balance transfer offers.

What mistakes should I avoid after balance transfer?

3 Mistakes Often Made After Balance a Transfer

If you've decided to transfer the balances of your credit cards in order to save money on interest, congratulations on making a smart decision. Of course, things that start out as smart decisions can turn into no more than simple stalling techniques if you don't follow through with your plans.

Here are three of the most common mistakes made after people transfer their credit card balances. Avoid making them and you'll be off to a good start.

  1. Paying late. When you pay late, you might trigger a higher interest rate on your transfer balance, and you'll definitely incur a late fee. In addition, this can hurt your credit rating, so not only are you costing yourself money, but you could be damaging your credit.
  2. Not paying off the balance before the introductory rate ends. When you transfer the balance of your credit cards, you pay a fee to do so. Since you go through this effort to save yourself interest charges, it only makes sense to pay off the balance during the term so that you maximize your savings.
  3. Continuing to accumulate credit charges. If you transfer your credit card balances, it's important that you stop spending and do not accumulate more debt.

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