Applying for balance transfer credit card? – Avoid gambling!
Today, best credit card companies, in an attempt to help credit consumers overcome debt, offer numerous credit card applications for balance transfers serving the purpose. Discover, American Express and Chase Bank are rather generous in balance transfer credit card applications offering consumers no annual fee and 0% Intro APR on balance transfers.
Being appealed by such incentives as no annual fees and lowest APRs, let alone the balance transfers themselves, consumers rush for such type credit cards turning it into a sort of gambling. Well, it would be all right if you know the rules of the game and can really turn the balance transfer credit card deal to your advantage but most likely, you don’t.
So, we’re here to explain to you how balance transfers credit cards work and whether they bring more good than harm. If you’re currently going to apply for a balance transfer credit card to manage your credit more effectively or to cope with the present debt, you’re strongly to recommended to follow our advice.
What is a balance transfer credit card and how does it differ from all others?
A balance transfer credit card is just a regular credit card either for good or poor credit history, allowing you to move the balance you run on your preset card at a lower interest rate, so that you're able to pay off the balance more quickly.
The other attractions of a balance transfer credit card are 5% cash back bonuses that never expire and $0 fraud liability guarantee. More sophisticated credit consumers find these features of great advantage and see them as a winning addition to the balance transfer option.
Being credit illiterate or just too self-assured, people start moving their balances around wishing to both, cut up debt and gain more at lavish rewards and low interest rates.
But it all is not that smooth as it seems at first sight. If it were, balance transfer credit cards would be the best choice for both, good and poor credit consumers, all pursuing their own goals. But it is far not so and we’ll tell you why.
Balance transfer credit card may take inexperienced credit consumer to a financial deadlock at best and to a balance transfer hell at worst. You may start with a relatively small amount of credit card debt or even no debt at all and find yourself owing more than you can repay and in need of total credit repair.
So, how does it usually happen that a credit improving tool turns to the opposite? Well, the answer is simple. It’s the lack of information and people’s ever growing tendency to overspend. Commonplace, you say. Yes, it is, but no less significant.
Let’s have an insight into the process of balance transfer credit card use and disclose the pitfalls for you to be aware of and avoid.
Imagine, you are carrying a modest credit card debt on your best reward or no annual fee Visa or MasterCard. The annoying debt prevents you from making the most benefit of the rewards program or reduces to 0 the no annual fee option. You, naturally, want to move it.
Your next step? You transfer the balance to one the Citibank, American Express or Chase Bank credit cards and have all the honest intentions to pay it off. And your intentions really are worth of praise.
But that’s where the problem comes! Your intentions run counter to your actions once you’re unable to resist a new purchase. And one purchase is never enough. The result is, you accumulate serious debt on your new, balance transfer credit card, and turn back to your previous plastic.
Now you have two debts in fact and they become your financial nightmare. That’s what you are to be afraid of – your weakness to resist unneeded spending and your motto – “I’ll pay for it later!”
You needn’t be afraid of balance transfer credit cards but you should approach them with caution and proficiency. If you’re sure you can, kill your debt with lower interest rates.