For one to be qualified for a balance transfer, one is needed to have a very good credit standing. Balance transfer is one of the sure ways on enjoying reduced interest rates on credit cards. With a balance transfer, one`s old credit card debts are transferred to a new credit card. With your new company, you are required to pay off all your debts in a lower rate at a certain period of time. If one is able to make the full payment within the given period, then an interest of up to 0-2% can be applied but if one failed to do so then chances are you will be paying off the balance higher; higher than what you have thought.
Offering a balance transfer is one of the ways of credit card companies and banks to convince the public to use their credit card. Since this is business, you too should also be careful for you might end up getting tied with a company with high interest than your old one. Deceit is a normal thing in business; if you don`t get too careful then you might be their next victim. Hidden charges are more often than not where a credit card business gets its profit so be very careful with the rates.
There are some tools that you can use online for you to have an idea how much you have to pay monthly. This will give you a heads up whether you can manage the monthly payment or not. So when a company gives you an offer which is hard to resist, better think again. Offers which are too good to be true can have some drawbacks in them. A zero percent rate may be given to you but rates on purchases maybe too high. Do your homework wisely.
Most companies offer zero up to two percent interest rate on the first six to twelve months. If you are able to pay off your debts within the said period, then the low rates applied. However, when you fail to pay off, then you may even get penalty and be charged of higher rates. So if you are considering of having a balance transfer, be sure that you can manage the monthly payment or you`ll just be burdened with even a higher rate than the interest applied on your old account.
Card holders with a good credit standing are the most qualified people for the transfer. Banks and credit card make a gamble when they offer you a balance transfer so there might be some twists on the compromise made between you and your new credit card company. There might be some hidden charges which are not explained or introduced to you, so demand for the bank`s assurance that such hidden rates won`t apply.
Even if there are some ways on how you can straighten up your finances, there still is nothing better than practicing yourself to be the wisest spender. Use your cards only on things which are necessarily needed.