For many of us, using and relying on credit cards has become a way of life. The number of credit card users is on the rise everywhere, and while it seems to be a matter of convenience to the end user, unexpected facts about your credit card accounts might crop up any point of time. With the high interest rates credit card companies are charging, the option of opting for balance transfer accounts is growing in popularity all over the world. While this seems to be a worthwhile option for many consumers, it is important to tread carefully and be smart to avoid any potholes on the way.
The balance transfer option enables customers to transfer or shift their debt from one credit card company to another. Most companies have special options for new users who opt for a balance transfer. These include very low rates of interest on the transferred amount, and a prolonged grace period of repayment. Therefore, users can pay back their debt over a longer duration and still not be affected by increasing interest rates. Financially, this is the best option when you are struggling with high monthly credit card payments, but the following points must be kept in mind when choosing this option.
Research Properly, Choose Carefully
The first step while opting for a balance transfer account is to choose which company to migrate to. With competition at breakneck levels, most companies have a number of lucrative deals to entice prospective customers. These can often be confusing to understand and apply to the situation you have at hand, so make sure you spend considerable time looking through the various features that come with each package. A clear understanding of the package on offer will make it easier to choose and ensure you are taking the best step forward.
Spot That Fee
While balance transfers are often characterized by very low or zero interest rates, a few companies can charge a bulk fee for facilitating the transfer itself. Fees like these tend to be hidden away in the volumes of fine print in the offer documents. The smart way is to analyze very carefully, so as to locate the possibility of these charges being applied and avoid any surprises. Most companies consider waiving this fee on negotiation from the customer`s side, so if you are well equipped to deal with this eventuality, it should not be a deterrent.
Time It Right
The most important factor to keep in mind while opting for a balance transfer account, is the duration of time or the grace period on offer to repay the transferred debt. While it might seem easy at first, you need to make sure you have the available finances at the end of this grace period to completely pay off your debt. If you are proactive and plan ahead, then you will be able to pay off the debt seamlessly on time.