One of the best ways to wriggle out of debts that you cannot easily clear is by opting for balance transfers on another card that have favorable terms and conditions. However, this is a task that is easier said than done. A lot of people who blindly opted for balance transfers without giving it a second thought have regretted their decision which only added to their misery. In order to avoid such circumstances, there are a few questions that you need to ask before you opt for balance transfers on credit cards.
Question #1: Is there a promotional offer you can avail?
Considering the fact that the credit card industry is highly competitive, banks are stretching themselves thin to ensure they offer irresistible deals to prospective clients. Most of these promotional offers encourage balance transfers by offering zero percent interest rate. Look out for these offers. Before you sign the application form, ask the bank if you are being given that offer. If the answer is negative, then it is wise to shop around and look for cards that can offers you steal deals.
Question #2: How long will the promotional offers last?
This is a critical question that needs to be answered well in advance. Most banks roll out introductory rates only for a couple of months. Opt for cards that extend the promotional offer for six to twelve months so you can get better value for money and clear off a significant amount of debt you currently have. The new credit card acts that have come into play stipulate that every bank issuing credit cards
should roll out the promotional offer at least for a period of six months.
Question #3: What are the annual fees, APR and other rates applicable on your card once the promotional offer expires?
To avoid undue stress at a later point in time, find out the annual percentage rates and annual fees that will be levied on your card once the introductory period is over. If they are too high, then look for other options that offer favorable fees and rates.
Question #4: Are you eligible for the promotional offer?
Though a lot of banks do offer introductory rates, not all customers qualify for that. Most of the time, people with really poor credit score and bad credit history are not given the privilege of availing the promotional offer. In such cases, you will need to negotiate with the bank and convince them to offer you a good rate so you can reduce your debts and get going on your way to repairing your credit history.
Question #5: Are there any processing fees associated with the balance transfer?
A few banks offer introductory rates, but make up for it by charging processing fees for initiating the balance transfer. Irrespective of the amount you would like to transfer, certain banks charge fees which may be quite high. Talk to the bank to find out if the fees can either be waived off or reduced so you can use that amount to clear off your existing dues.