The content is accurate at the time of publication and is subject to change.
So many people end up with high interest credit cards these days. Many say the marketing email claimed differently, others confused by all the offers just picked the one that gets them the most points. Only when the shopping is done, there is a realization that things are rather bad. Firstly there are a million different fees on the card, over and above that there just seems to be no end to the interest rates and additional charges. I bet this is not what you had in mind with the card, you may have thought you were going to be saving money by spending less and even winning free goodies as you go on. What a shock to see bill over bill mounting up.
If you have had such unpleasant surprises or you are in the middle of a credit crisis, there is good news and bad news. The bad news first- it will definitely affect your credit scores and repairing it can take as much as 7 years time. Coming to the good news you can fix the situation and close the balance that is outstanding little by little once you do a balance transfer. In case you are wondering how that works its relatively simple. You may even have received emails about this offer. The outstanding amount on the card will be transferred to another one which has a low interest rate or no interest for an introductory period. The balance transfer may incur some fees based on how high an amount you are transferring or it may also come with no fees. But you need to check out how long the introductory period is for. If it is lasting less than a year or just three months you have to see if that will work for you in terms of closing the balance.
Once a balance transfer is done or while it is being processed you may need to pay the minimum amount on the old card so as to avoid being reported to the bureaus. In addition once the transfer is done most people misconstrue the situation. Since there is no interest they take it as a chance to get some more spending power. However it is important to note that in many cases the 0 interest rates would be applicable only to the old balance on the card and not to any new purchases. This means any additional purchasing that happens would occur at an interest rate that may be higher than the one on your old card.
The idea of a balance transfer is to close the debt at the earliest and to make sure you have lesser interest rate once the introductory period is over. In many cases the interest rates may be the same if not just a little lesser. Do make sure you know exactly what you are signing up every step of the way. In many cases people make hasty financial decisions that cost them more in the end than before.
