The content is accurate at the time of publication and is subject to change.
When you own a credit card, it is important that you become a responsible cardholder. Credit cards have become an important part of the household in sustaining the daily needs and expenses of the family. But the most important purpose of this plastic card is being a savior in times of emergency. There are credit cards that can be used internationally but of course with a higher interest rate at times. Even if credit card companies have lowered their interest rate charges, it still is a little difficult for most people to pay off due to the very slow economic revival. With this situation, consumers find ways to make things easier and a little more convenient. One of the ways is through a balance transfer.
Balance transfer is applying for a new card where your balance from the old credit card is carried to the new card with lower interest and less stricter conditions. If you find yourself too burdened with high interest rate, there is nothing wrong entering into a compromise. With a balance transfer, rates are lowered down and a consumer is required to pay off the balance at a certain period of time. But when repayment is not fully made after the agreed payment period then rates gets higher and could even possibly incur penalties. If you wish to go for a compromise agreement as balance transfer, it is important then that you understand all the underlying principles and policies. Remember to close all your existing accounts first before making a balance transfer.
On the first six months to one year of the balance transfer, a consumer enjoys 0% interest rate so it is very beneficial when debts are paid off before the period expires or ends. While you can enjoy a 0% interest, check on the interest applied for purchases for more often than not purchases have higher rates in most companies.
There are hundreds of companies that may offer you a balance transfer. Make sure that you do your homework; research and make a good comparison. You may want to personally visit the banks or do it online. Have all your questions answered before applying, this way you can have a better and full understanding about your new account. One thing that you need to watch out on is the transfer charges. In most cases, the fees applied depend on how much balance has been transferred. Make sure that you won`t get charged higher than a hundred dollar.
Of course banks and credit cards do this in the name of business. They don`t offer you a balance transfer without them getting any benefit in return. Make sure rules are clearly set or you`ll end up making them even richer. There might be some hidden charges behind the zero interest rate they give you. Read the fine print and ask assurance from them that you would not be charged of an amount you are not aware of.
With this very easy way to reduce interest rates, there still is nothing better than reminding yourself to be a wise spender at all times.