Avoid These Mistakes When Doing Balance Transfers

June 20th, 2010

Before you apply for the first balance transfer credit card you see that looks like a good deal, you should be aware of some of the common balance transfer mistakes people can make.

2.99% p.a. for 12 months9.99% p.a. for 12 months (reverts to 13.29% p.a.)

Balance Transfer Mistakes to Avoid

If you spend a little time learning how to avoid these simple balance transfer problems, you could find it much easier to take control of your debts more easily.

Not Enough Research

Some lenders offer balance transfer deals that look too good to be true. While a 0% deal might seem great, there are times when this might not be the right offer to suit your own personal financial situation.

By shopping around, you could find there are deals available that are far more suited to your own personal circumstances. If you choose the wrong deal you could be making one of the major balance transfer mistakes that could put you right back at square one.

Not Making the Transfer In Time

The window of opportunity of transferring your outstanding balances over to your new card is relatively small. Once your card is opened, be sure you transfer your balances as soon as you can to help reduce your interest costs sooner and to avoid missing out on the time frame available to you.

Choosing the Wrong Deal

0% balance transfer cards can be very tempting, but they’re often only available for a short term. If you know you can’t realistically repay your balance in full within this time, or if you have a larger balance, you could avoid balance transfer problems by opting for a ‘life of balance’ card. This will allow you to enjoy a low rate for as long as it takes to repay your credit card debt.

Using Your Card for The Wrong Reasons

If you’ve done your homework and you’ve transferred your balances over to a low interest rate card, then your intention was obviously to try and reduce your debt at the same time as reducing your interest costs as much as possible.

Unfortunately, some customers figure they’ll get the same low interest rates on the amounts they spend on purchases as well. This isn’t always true. In most cases, the money you spend on purchases attracts a much higher interest rate. The same is true for cash advances, which also attract much higher interest rates.

If you do choose to apply for a balance transfer card, be aware of these simple balance transfer mistakes and try to avoid them as much as possible. You’ll be thankful when your debt is reduced that you learned how to get around some of these common balance transfer problems.