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Research: The checklist before you go for a balance transfer -

Balance transfers often provide a potential opportunity to change your finances and help you get even by paying off all outstanding dues. This is because a balance transfer deal by definition will let you enjoy a low interest rate for a decent period, during which time you can try and pay back your outstanding due amount. Here are some of the things you must check before you go for the balance transfer deal. Balance transfers adversely affect your credit rating, which is why you must be very careful when you are taking this step.

Are you sure about the promotional period?

Balance transfers are notorious for these kinds of tricks where the promotional period varies depending upon the credit rating of the individual. So as long as you are not sure what the promotional period is, it is not worth going for a balance transfer to another credit card. Some credit cards promote the deal with a promotional period of up to 21 months, which means, in some cases it is 21 months, but not always. Those with bad credit might get a promotional period of only 6 months and it might come as a surprise to them when they finally realize it to their loss.

What is the APR during the promotional period?

Balance transfer deals generally involve low APR during the promotional period. There are a lot of credit cards that offer 0% APR during the introductory period. If you are sure about this offering, you can go for the balance transfer as you wouldn't have to pay any interest on your outstanding balance during the promotional period. Therefore, instead of worrying about the accruing interest, you could simply pay the outstanding due, through monthly payments.

Is the APR low after the promotional period?

Ensure you don't fall for a trap with a balance transfer deal to a new credit card which levies a very high interest rate. If you are unable to pay back the entire outstanding amount, and are left with some balance, then a high interest might wipe out all your savings during the promotional period. Hence you must only choose a balance transfer deal, wherein the APR is equal or lower than your current credit card. Otherwise the transfer is not simply worth the negative hit that your credit rating is going to take.

Are there any reward programs?

Establishing a good credit history is not the only advantage of a credit card. A good credit card should help you in making some savings and getting some benefits. If you are going for a balance transfer, you must ensure you are going for a credit card that offers some good reward programs if not the best.

Is the credit reported?

If balance transfer is purely for the purpose of establishing a good credit and repair bad credit history, then it wouldn't be of any use if the card doesn't report the credit to a bureau. You must ensure it is a valid credit card that reports your history.