How to account for zero percent credit card balance... - Balance Transfers Questions


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How to account for zero percent credit card balance transfers?

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It is very likely that you will be offered a credit card with balance transfer somewhere along the line. When you look for a card, you must ensure that you do not put yourself into unmanageable debt. Credit card debts are very expensive and can put you into serious financial trouble. Getting into debt is only going to increase the monetary assets of the credit card companies.

You need to do a market comparison to understand which cards will suit your needs the best. A balance transfer credit card will help you to transfer all your outstanding balances, onto a new credit card by paying a small fee. If you do this, you will get more time to pay off all the debts without incurring any excessive interest rates.

You need to check the fees that you have been charged when you move a high interest rate credit card balance onto a new card. You need to consider all the fees that you will have to pay, when you make a balance transfer, to understand whether or not it will be beneficial.

The fee that you pay on the balance transfer is the main aspect that you need to consider. If the fee is too hefty, it might not make sense to go ahead with the transfer. Pretty much, every card will require you to pay around three percent over the debt that you owe. For example if you move a $1000 to the new card, you will pay $30 as fees.

That amount will automatically be transferred to the outstanding balance. It is important that you pay it off as soon as possible, since the fees will attract a high interest rate. You need to figure out how much you can pay by the time the grace period ends. If you fail to pay if off, you will end up paying a lot of money in interest.

You will also have to account for the fact that if you do not pay all the outstanding balance within the stipulated period, you will pay the regular interest rate on that balance. The interest free period can be anywhere between a year to even two years. You will have to find out how much that interest rate is going to be, in order to avoid being stuck with a huge debt to pay off; with a high interest rate at the end of the free interest rate period.

A balance transfer card must be used solely for that reason, which is to transfer an outstanding balance. If you start using the card to make other transactions, you will lose out, by paying a lot of interest on the money spent. You must fight the urge to make other purchases using the card. Many cards will charge the regular interest rate on any purchases made over the balance that was transferred. If you take into account all these factors, you will ensure that you can pay all the outstanding balances without incurring any extra cost.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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Intro APR on Balance Transfer: 0% (18 months)

Ongoing APR on Balance Transfer: See terms

Excellent, Good Credit

Intro APR on Balance Transfer: 0%* (21 months on Balance Transfers*)

Ongoing APR on Balance Transfer: 14.49% - 24.49%* (Variable)

Excellent, Good Credit

Intro APR on Balance Transfer: 0%* (18 months on Balance Transfers*)

Ongoing APR on Balance Transfer: 14.99% - 24.99%* (Variable)

Excellent, Good Credit

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