Dealing with a 0 Balance Transfer Credit Card
What does it mean to have a 0 balance transfer credit card? It means that a new cardholder can avail of 0% interest rate for a certain period of time. Issuers use this to persuade people to use or avail a certain credit card. It works by having a client transfer his balances from one card with high interest rates to theirs. After that, the client will pay the older card with the new card at 0%interest rate.
Most of the time, banks would charge transfer fees for the processing that they would have to do in handling the accounts.
The best way to take advantage of the 0 balance transfer credit card is by transferring debt balances to the current card and, as swift as you can, pay off your balance. These cards usually have expiration dates for the 0% interest rate offer.
Here are some facts that new applicants should take into consideration regarding this type of credit card.
1. There are few card issuers that would limit their introductory 0% interest rate by not allowing transfers from high interest rates.
2. Some issuers would charge as much as $50 for processing fees.
3. There are some companies that would issue penalties for a single late payment. Several issuers would revoke your privileges, including the 0% interest rate.
4. Very high interest rates could be charged to your account right after the promotional period expires.
Tips on How to Keep Tab on your Balance Transfer Card
1. There is no need for you to have a 0 balance transfer credit card if your debts are small or you are currently using a similar one.
2. Have a credit card that you can use and be sure to apply for a card that suits your current financial status. This is in case issuers would conduct a credit investigation.
3. Make certain you can afford the interest rate and rigidity of the payment scheme after the promotional period expires. Some long-term conditions may not be suitable for you.
4. Be certain that you can pay your balances before the introductory 0% interest period expires, especially when you have transferred a balance with a high interest rate.
5. If you think you cannot pay the large balance from your high interest credit card if you transfer it to a 0% interest card, then do not apply. This could result to a bigger balance than the original that you wanted to get rid of.
Always be vigilant of the cost you have to pay with your new 0 balance transfer credit card. Be sure to read the fine print on your card to avoid trouble.
About the Author:
Elizabeth Williams, Editor-in-Chief for CreditCardFlyers.com CreditCardFlyers.com makes it easy to compare and apply for a variety of credit cards featuring low or 0 balance transfer interest rates.
