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Research: Planning your balance transfers -

Balance transfers are effective ways of ensuring that you do not have to default on making a payment to your credit card company. If you have landed yourself in credit card debt, then all you have to do is open a new credit account and transfer your outstanding balance onto it. But there are a few things to remember before you go about doing this.

Choose the right credit company

Many credit card companies will entice you into making balance transfers. All they are doing is hinting for customers to fill their customer base. The banks want you just as badly as you need them. Hence they will be vying against each other to make you a good deal or offer you spectacular rewards. Take your time to shop around and find the best deal before settling for any particular credit account.

Not all offers are permanent

There are many offers that are made by banks for a limited time period. These are introductory offers or seasonal offers. Make sure that the offer that you have been given by the bank is a permanent offer or at least find out the time period during which it will be valid before making a decision. Many times banks will offer you arrangements where you will not have to pay interest for any purchases made during a certain time period during the initial months that you own the card. These sort of offers are very valuable and do not let go of them if you get hold of one such offer.

Always check the affect on your credit record

Balance transfers will have an effect on your credit score. you will have to find out how it will effect it and what you can do to minimize the effect. If you open a new account and transfer all your outstanding balance to it, your credit score will in fact increase. But it will decrease if you close your old account. This is because your debt to credit ratio will go up. Always make sure that your debt to credit ratio is as low as possible.

Use your old credit card wisely

Whenever you conduct a balance transfer, always check to see whether all the changes have been reflected on both your credit accounts. Do not close the old credit account. Keep it active and clear out all the outstanding balance that you have on it. It is better to have just one credit account with an outstanding balance to worry about rather than two at the same time. Get written or printed documentation of every change that has occurred in order to be able to show proof in case there is an error in your credit score in the near future. The entire purpose of the transfer is to ensure that your credit score does not suffer. If you make some error and leave a little balance behind or are not aware of some services fees on your old credit card, you might end up paying the price by means of a reduced credit score.