Combine Your Existing Credit Cards By Doing A Balance Transfer

August 26th, 2010

If you own credit cards and you haven’t been able to pay your debts within the two months of purchases made and your interest is over 10% then you are a great candidate for a balance transfer.

2.99% p.a. for 12 months

A balance transfer can be an ideal way to combine your debts into one. You would have one payment, less hassle and all the while you’ll be saving money.

By choosing this option, you will be saving money (in some cases a LOT of money) and paying down your debt faster because of the lower interest rate and the decrease in fees.

When looking for cards, it would be most beneficial for you to find offers that provide you with no interest for a set period of time. These offers usually range from 6 months to 12 months and sometimes even more. You can even find cards that provide a low interest rate for the life of the balance. This is a great option for those who would like to take a little more time to pay down their debt.

Things To Consider Before Taking the Plunge

A balance transfer is a very good option for those who are paying a lot of interest currently on their debt. However, there are some things to consider before actually making the transfer because the you want to be aware of all the requirements.

For example, if you are offered a 0% balance transfer rate for your credit card, you should understand that the rate will not last forever and that after the introductory rate expires it will revert to a higher rate. Sometimes this rate is significantly higher. If you are not able to pay your debt down during this introductory period then it may not be worth it to you to make the switch.

It is also important to know that you may be required to cancel all of your existing credit cards when you have secured a balance transfer deal. There are some providers that perform this service for you and some others do not. If you still want to keep those cards open then the balance transfer card may not be a good option for you.

You should also know that some balance transfers are limited. This means that you may be limited to transfer up to 95% of the card limit that you qualified for. If this is much less than the balance that you want to transfer and pay down then you may need to look elsewhere.

It is also important to know that your card should be used for balance transfers only. If you choose to take out a cash advance or use it for purchases, you may end up paying very high fees and a lot of interest. Use the card for its intended purpose.

Even though there are some limitations, a balance transfer credit card can be an excellent way to pay down your debt.