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The best benefit of using balance transfer is it allows one to enjoy low to even zero percent interest charge. But like all the other offers which are almost good to be true, there are some disadvantages that go with it like high annual and balance transfer fee. For you to know whether balance transfer is the best option for you, then have these following questions be your guide.
I am qualified for the rates offered?
When you are pre-approved of a bank or a financial company`s balance transfer introductory rate, this would not mean that you are actually qualified of the rate you applied for. People with excellent credit are entitled for balance rate transfer rates which are low-rates could be as low as zero percent but could also be around one to two percent. Presuming will not help you get the rate you`re wishing for. Have a conformation with the back so you would know the things that you needed to do to qualify you for their low introductory rate.
Is balance transfer really a good and effective way to save money?
Getting qualified for a bank`s low introductory price is not an assurance that you`ll enjoy great savings for you still need to pay for the annual and balance transfer fee with your new bank. Such charges are not applied by all banks so it is important that you shop around for the banks that don`t charge on them. There are some sites where you can use a balance transfer calculator for you to have an idea how much you can save (if there would be any) when you go for balance transfer.
When you`ve decided to go for it, then how long would it take you to repay the balance?
It has always been best when you are able to pay off the balance within the grace period or the promotional period. Promotional periods usually last within six months to one year and if you are unable to repay the balance within the said period then you will be burdened of even higher charges. You will only find yourself paying too much than you thought of.
How long is the promotional rate?
Promotional or introductory rates are at least running for half to a year. It is then very important that you know when the promo is ending so you won`t get any surprises with the new high rates taking place.
What happens after the promotional rates end?
When the promotional or introductory rates have ended or expired, your account will be back on its regular balance transfer rate. If you fail to repay your balance monthly then charges rise.
What would be the impact after the balance transfer is made?
The utilization of your credit results to 30% on your credit score. The good thing though is that credit card balance is corrected on your repaying stage. Diligence and discipline are two needed traits when you go for balance transfer for you to enjoy the full benefits of using it.