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One must always ensure that their credit scores are high as well as consistent over a period of time. This is the only way to ensure good rates on credit cards. For instance, with a credit score of over 700, and if the current card offers a 15% interest rate, one must search for a card with lower interest rates. Most companies mislead customers in spite of advertising a 9.9% interest rate. The fine prints will have something else, which most of us could easily miss. The 9.9% interest rates are for those, who have a credit score of almost 800. This is not the credit score that most people possess. The next interest rate is at 12% and then 14%. The customer could get any of these interest rates, and that would depend entirely on the issuer. Both these rates would appear lower for someone who wishes to opt for a new card at a lower interest rate and do a 0% balance transfer.
Most banks will allow a 0% balance transfer when opening a new account. So, one must ensure that the old account is retained while opening a new account. The old account must not be closed, but must be left open with the balance remaining at 0. This will help in improving the credit score when applying for loans and other cards. The debtor will have to know the debt-to-credit ratio to compare credit card interest rates effectively. For instance, if the combined debts for all cards are $10,000 and $2,000 in debts or combined balances, then the debt- to-credit ratio will be 20%. This is acceptable to obtain a low interest rate credit card. The debtor would ideally want to stay within a 25% debt-to-credit ratio. If this is the case, then the ratio goes up, and the strategic move would be to pay off some of the debt, and the new credit scores will reflect that within 30 days, making them eligible for lower interest credit cards.
The 0% balance transfers are very beneficial if you can pay off a huge part of the debt within this 0 interest period. These balance transfers are not so difficult to get, but ensure that you read the fine prints before signing on the dotted line. Sometimes the 0% interest period will last much longer, and that is the time to pay off all the debts.