How Can A Balance Transfer Save Me Money?

August 19th, 2010

If you are one who has several credit cards that are carrying high balances and high interest rates then a balance transfer may be a superb choice for you to help save some money. There are many options available now.

2.99% p.a. for 12 months12.74% p.a.

Many companies offer great rates and even promotional items like clock-radios or free watches. While these items are nice, they should be the sole reason to make a balance transfer deal. It would be in your best interest to know what the different options are and to also make a healthy assessment of your own circumstances before jumping into a commitment.

Good Reasons For Making a Balance Transfer

There are many reasons to make a balance transfer and some of them are better than others. Here are some good reasons for making one.

Only making minimum payments – If you are only making the minimum payments on your credit card and you feel like you are drowning in debt then a balance transfer credit card is a good choice for you.
Have multiple credit cards – If you have a lot of cards and a lot of debt on each of them then you may be able to put all of it on one card and be able to make one payment.
Paying high interest – No one wants to pay high interest. It makes it nearly impossible to pay your debt down. If you are paying high interest then getting a balance transfer card with low interest is a smart move.

Not-so-good Reasons to Make a Balance Transfer

Use the savings for more spending – If you want the lower interest rate in order to use the extra cash for spending then you will put yourself in further financial distress.
Get a free gift – A free clock-radio is not the best reason for getting a balance transfer card.
Use the card for purchases – This can get you into a lot more debt trouble. Your debts will take much longer to pay down if you use this card for purchases in addition to your balance transfer.

Most of the time when consumers are looking at balance transfer options it is because they want to save some money or their finances and debts have grown out of control. Making the choice to move your debt this way is intended to make your life less stressful, not add more stress to it. You must always remember that when you are using a credit card that it is, indeed, credit. The money is not yours and must be repaid. With interest. Making the effort to curb your spending, reign in your debts and organise your finances will only make your financial life and your whole life, in general, much more peaceful.