Choosing the right balance transfer credit card
is not always the simplest thing to do. It is a constant game where credit card
issuers and the credit card holders are trying to outsmart each other. Therefore, if you need to benefit from a balance transfer
you have to strategize well, pick the right card and use its terms well. Here are some things you need to keep in mind when selecting and using a balance transfer credit card to your benefit.
Check the introductory period
In the present situation, if you have a good or fair credit rating, then going for an introductory period less than 9 months means that you are not getting a good deal, and the transfer to another card isn't really worth it. The promotional period on some credit cards
is as high as 18 months, although such cards are approved only for those with excellent credits. But the bar is set for at least 1 year of 0% APR, so that you can think about going for the balance transfer.
Check the fine print
There is a big gap between the cup and the lip. That is the case with credit card terms where the promotions are always undermined by the fine print. A card promoted with 0% APR for over a year could offer you an introductory period of just 6 months in the pretext that your credit rating is not satisfactory. So you need to thoroughly inspect the fine print of the card to find out all the terms and regulations, and also everything about the deal, to ensure there are no limitations or caps which have been sneaked in.
Ensure that the credit card to which you are planning to balance transfer to, doesn't have any hidden fees. It is necessary to ensure you are not paying any annual fee or balance transfer fee if you can avoid them. If you cannot, ensure they are not too high, or they might start eating into your savings. Therefore you must be spot on with your calculations to ensure that the saving you make due to 0% APR is significant and justifies a balance transfer.
You must check that the credit limit on the new credit card is equal to or more than the previous card. If your credit limit is reduced, then your credit rating will be affected too. The credit utilization has to be lower, which means for the same expenses you will score more on a card with higher credit limit.
0% APR on purchases too
Many credit cards offer 0% only on the balance transfer amount and not on purchases or other charges, so any payments made at the end of the month are contributed only towards the balance transfer amount, leaving you to pay interest on the outstanding balance, (purchases, cash advances etc.) In order to stay away from these strategies, ensure that you take a credit card where 0% APR is offered on all purchases too, at least for the first 6 months.