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The credit card balance transfer service sounds like a good deal: you are able to transfer your funds from your old account to a new one while lowering the interest rate of your debts. But be warned that there are a lot of other things concerning the service that you need to know about other than just the benefits, and it is in your best interest that you keep these things in mind. Here are some of the things you need to look for in the contract, most especially in the fine print portion, so you would not be surprised if these things hinder your finances.
Check if there are any balance transfer fees that are included with the service so you would not be surprised if you find your transferred amount missing a few dollars. Usually, these fees are a small percent of the total amount you are transferring instead of a flat rate like $50 per service use. Another thing you have to look for in a balance transfer service is that if there are any caps that would limit on how high the transfer fee could get. If the service does not have any caps then don`t agree to the transfer, or better yet don`t sign up for the offer.
You should also take note of the other interest rates of your new credit card, as it might even add up more to your debt amount if you are not careful. Be warned that your new credit card would have rates that are just as high as or even higher than your old ones. This means that if you carelessly make purchases with your new card, then that would add up to your debt. So spendthrifts, be warned about this.
There is also the problem with payment allocation, because sometimes your payments might not be allocated the way you assumed to them to be. Check the fine print if your card issuer is likely to allocate the payment you made for purchases to the low or 0% interest balance, in which the amount you paid for buying items and services would be compounded with interest.
You should also have to know just how long the low or 0% interest rate grace period would last, as well as how much the interest rate could get high after that period is over. Remember that the grace period would not be there forever, and when that time is up then your card issuers would apply a higher interest rate on your debt if you have any remaining balance on your account. For consumers who are serious in paying off the debts owed, you need to keep this in mind if you want to settle your issues as soon as possible.
Be sure to thoroughly search for these items on the balance transfer contract so you know what to expect when you use the credit card balance transfer service. This way, you would be ready to handle these things when you use the service.
