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Research: Credit Card Balance Transfer Do’s and Don’ts -

If you are carrying an abundant balance on your credit card that’s racking up the interest charges, chances are that transferring that balance to a different card with no or lower interest it will save you money in the long run. Here are some suggestions about how to best go about finding the best balance transfer card to suit your particular needs.

Do Some Reading

Pay particular attention to the fine print. Yes, it’s boring, but the most important thing about transferring balances from card to card is to know exactly what you are getting yourself into. Many credit card issuers are rewriting their disclosure agreements to make them less convoluted and easier to understand, so doing your homework will be easier now than ever. If the card you are considering offers a teaser intro APR of no or low interest for a specific period of time, establish a repayment plan to eliminate the debt within the allotted timeframe. Learn what the APR will jump to once the teaser rate period expires, and whether or not there is an annual fee or any additional fees associated with that account.

Don’t Be Lazy

Be proactive when it comes to choosing a balance transfer card. Don’t just lie back and let the offers come to you – look around online to compare what’s out there. Figure out the features you want – 0% interest, no annual fee, airline miles, cash back rewards – and then look for the card that has the most appealing combination of your desired perks.

Do Be Discerning

While you may be bombarded with dozens of tempting credit card offers coming at you from all angles – in the mail, on TV, via the internet – don’t go crazy and start applying for cards willy-nilly. Too many credit inquiries will eventually put an impact on your credit score and will most likely drag your score down to the point where you may not qualify at all.

Don’t Ditch Your Old Accounts

After you shift a balance from one card onto another, you may have the urge to terminate the old account to tidy things up. You should, however, leave it open, even if it has a high APR – just set it aside and don’t use it. Closing accounts does not make them vanish from your credit report, and it is actually better for your credit score the higher the ratio you have of available credit to outstanding balances.

It’s especially important to leave that line of credit open if you have had that particular card for a long time. Credit scoring companies look at people with established credit patterns and paying accounts in a timely manner.