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When you pick a credit card, knowing what it entails is extremely important. You do not want to end up with a card that costs way too much and you cannot afford at the end of things. That is why you should completely understand and read through the details of your credit card agreement before you sign up for it. Most people get drawn in by rewards and other catchy terms which lead to them signing up for an inordinately expensive card. The important thing is to make sure that you opt for a card that is not too expensive and then work things out. A good way to cut down on the debt on your card is to look for a suitable balance transfer. However, when you are looking for a balance transfer you have to be careful not to be deceived by any gimmicks.
When you want to look for offers and decide on a good one, the best way is to compare the offers that are available. When you are considering a balance transfer, you should be able to compare the offer properly if you want to make a good decision. Most of the time, people end up making mistakes because they perceive things wrongly and especially with balance transfers things can get rather confusing. When you want to transfer the balance especially if it is a large amount, you should bear a few important things in mind. Firstly, if the transfer amount is more than 30% of the available credit limit, it can affect your credit score. Therefore choose a new card carefully. Until the balance transfer has actually been processed you cannot stop making the payments on your old card.
Once you have transferred the balance to a zero interest card through a balance transfer, you need not close the old card. Especially if you have had it for many years, it is important to keep it open as it can mean serious damage to your credit score if you do so. The total credit limit available is also an important determinant of your credit score, so bear that in mind as well when you consider the card and what to do with it. When you are struggling to pay off a large interest rate, a balance transfer is without a doubt the best choice available.
Another important aspect to consider is the balance transfer interest rate. The interest rate on the new card may be zero or substantially less but it would most often be for a limited period of time. 0% interest rate may be applicable for 3-6 months of time but low interest rates can be extended up to 15 months. Make sure you know what works best and what you are eligible for and then negotiate with the creditors on it. You should also check out what kind of annual fees are applicable on your balance transfer. If you consider everything carefully, you can strike quite a good deal on your card.