You may already know that many credit card companies offer balance transfers without any charge. What consumers do not know, however, is that more often than not, the company has some fine-print detail that would eventually cost more. For instance, the company may charge 0% for the transfer, but does not do the same for purchases. Also, a company could offer a balance transfer rate of 0%, but it does not mean that the 0% rate will apply to everyone. If the consumer happens to have a bad credit history, then the 0% rate simply does not apply. Moreover, this kind of rate applies for only six months or an entire year, depending on the credit card company.
What the consumer therefore has to do is to first make an analysis of his or her credit card debt. In doing so, the consumer must identify which among his or her cards have the highest interest rate and base his decision in choosing another credit card from this analysis. The consumer should also keep in mind that it pays to be highly selective when it comes to shopping for credit cards and choosing which one to do a balance transfer with. Make sure to read the fine prints on each credit card, and choose the card with the best and beneficial features such as fraud liability coverage, no annual fees, and cash-back plans. Think long term and ask yourself, would the card benefit me even after the balance is paid off?
In some instances, offers for balance transfers will come from existing accounts you already have. The wise and better choice is to accept the offer if that / those accounts do not have existing balances. What credit card companies do is to recompense the balance on the lower rates first, gradually adding more interest to the amount you are paying.
You may want to take advantage of the “Grace Period” given by companies. Such Grace Periods last up to 25 days. The best way to make full use of this period is to pay or transfer the balance in full by the payment deadline. You can then rest assured that no interest will accumulate on any balance after this point, as long as such balance is not outstanding.
Another tip in making balance transfers is not just paying the minimum. When the consumer pays only the minimum, those who benefit most are the banks and creditors because they seldom affect the balance principal. Instead, only the accrued interest is affected.