Cash Fact

Credit card balance transfer is a great way of consolidating your credit card debt, and also finding a way of avoiding the terrible burden that debt can bring. Transfer offers are in high demand and many credit card issuers highlight their balance transfer features up front as part of their overall advertising package. These days the credit card companies are in heavy competition with each other to get your business.

But have you ever considered the dream ticket of always having an interest free credit card at all times, no matter what the circumstances? Well here is a check list of seven things you must do in order to get the best out of it.

1. Always make sure that your credit card balance transfers are carried out on time and with no overlap periods from one card to the next, which will cost you money in nasty interest charges. Make allowances for delays in the post when notifying banks and credit card companies by mail, and also note that different banks will move at different speeds when responding to requests.

2. Make sure that 0 balance transfer credit card offers are always current and available at the time you apply. There’s no point in making a mental note of an offer and then applying for it after it has expired.

3. Interest free balance transfer credit cards must be exactly that; be careful and look out for any hidden charges in the small print. A 0 APR credit card should be exactly what it says it is.

4. The type of card to transfer balances from is crucial. Store cards tend to have a higher rate of APR than normal credit cards, so consider transferring all these balances on one or more low interest card. You can end up saving a substantial amount of money. Proper use of the credit card balance transfer feature can be useful and convenient, and a vital way of avoiding credit card debt.

5. Trust your source. A low interest credit card or 0 interest credit card should be easy to identify, preferably from a source where you are able to make comparisons between different types of card. Ideally you should deal with a source which is impartial and which does not promote one credit card or bank over another. Also, your source should provide easy to read and understand comparative charts to help you make such decisions swiftly, without undue pressure, and without any fear of being misled.

6. Keep a note of the exact date of when your 0 interest period finishes, and apply for your new credit card balance transfer at least two weeks before that date.

7. Try and ensure that your interest free credit card balance transfer facility is flexible and quick. At present it is the norm to put details of your credit balance transfers in writing at the time of application. Bear in mind that both parties need to know what is going on at the same time. Make it easy for everyone, including yourself.

Around one third of all credit cardholders do not pay off their credit card balances in full each month, which means they are paying interest on the money for their purchases. However, in today’s competitive market many credit card companies are offering 0% credit card balance transfers for new customers. This can really help those people that are becoming farther and farther in debt by not paying off their balance.

With a 0% credit card balance transfer offer you can transfer the balance that you have on one card that is charging you 17% to a card that offers 0%. The new card pays off the debt that you have on the old card and then the balance is on your new card at the lower, better rate. Then you will have the time until this introductory feature ends to pay off the debt without incurring any interest fees.

A credit card balance transfer can be great if you can find one that will have the 0% long enough for you to be able to pay off your entire balance. Many of these credit card companies that are now offering the 0% balance transfer give you 3 months, 6 months, 9 months, 12 months, or 15 months to pay off your debt before you begin paying any interest on your balance. You should however, read the fine print of each credit card company to ensure that you will not have any other miscellaneous fees, and if possible, 0% on all new purchases as well.

If you do not believe that you can pay off the entire balance in the allotted time then a card balance can also be transferred to a credit card with competitively lower interest rates. American Express offers a fixed, low APR for credit card balance transfers for the entire life of the balance.

As you begin searching for a credit card balance transfer offer there are a few things you should take into consideration, which include:

Does the credit card company charges for balance transfers?

Do you pay off your card balance each month?

Will you need to charge additional purchases with the balance transfer card?

Will you pay off the card balance before the intro rate expires?

Some credit card companies may offer 0% credit card balance transfers but they may also charge you fees for the transfer. Most charge between 2 – 3% for the total balance transfer. You should always pay the minimum payment or you can find yourself paying finance charges. Most of the time, new purchases on the new card will not be given the same 0% APR and you will end up paying interest charges, since the money that you pay on the card balance will be put toward the balance transfer and you will be paying interest on the new purchases. Changing credit card companies before the expiration of the 0% or low APR may be the way to go if you still have a large balance left on your credit card.

So, you acquired a credit card and maybe spent a little too much and now find yourself barely being able to pay back the interest let alone the principle? Most peoples stories are somewhere along these lines, and it can be extremely worrying, particularly for people who are paying as much as they can already and who’s wages aren’t subject to any further earnings from overtime and so-forth, because this affords you very little chance of making any headway in paying the debt back.

Banks purposely give people credit cards because they know people will eventually incur interest, maybe default on a payment or two incurring fines for none or late payments. All of this is music to the banks ear; this is exactly what they want you to do. In fact, credit cards are known to be perhaps the highest interest money-borrowing schemes in the world, and they can sometimes leave you paying out more money than you would to a mafia loan shark.

I have been in this situation myself before, where I was paying as much as I could afford per month, but I was barely touching the principle debt and only just covering the interest. I knew I couldn’t get out of this situation so began researching into ways to try and get a grip on my debt. At first I considered asking the bank for a lower interest loan and paying off my credit card. This may have worked, but I would still have being paying off interest every month and I simply couldn’t afford it, and for the little less-interest I would have being paying, it wasn’t worth it.

Then, I found just what I had been looking for – an ideal solution provided by the bank which would help me get out of this cycle of debt. By going to another bank and getting a credit card with 0% interest for the first 6 months, I did a credit card balance transfer from my old interest-incurring credit card onto my new one. This way, I would still have to pay back the few grand I owed, but for 6 months I would be paying zero interest. And just before this credit cards offer of 0% interest elapsed, I obtained another credit card elsewhere and did the same, another balance transfer. By the time the year was out I had managed to pay back the bulk of my debt and my life became infinitely less stressful.

Many people aren’t aware that a credit card balance transfer exists, but they do, and the debt-receiving banks will gladly allow you to transfer you’re balance to them because don’t forget – banks want you to be in debt to them, and this is one way in which they are sure they are liable to make a few bob off you. The trick is to not give them chance and continue transferring the balance between banks until it is paid off.

Credit Card Balance Transfers

“Just don’t do it” would be the best possible advice for those who are serious about saving money and staying in control of their budget. Realistically however, most American’s do have credit cards and use them way too much. So if you are not going to heed the advice in the first sentence, at least you can use the advice that follows.Credit card companies are very competitive and if you have been a good customer will often let you negotiate a better deal with them than you currently have. Call or write the company, explaining that you are seeking better terms on your credit card. Tell them you would appreciate it if they would adjust your interest rate, you may be pleasantly surprised. If they are not willing to grant you better terms, there is a plethora of other offers out there floating around for the taking. In that case you can take advantage of a balance transfer. The offer of a balance transfer with very low introductory rates can be enticing and actually provide a reprieve on high interest rates, allowing you to pay down credit card balances. Just be sure you are getting a better deal than you are leaving by carefully examining the offer.One way a credit card company can entice customers of other card companies to switch allegiance to theirs is to allow new customers to transfer their balances at very low rates. With lower, or no, interest rates more of the payment is applied to the principal on that balance. Before making the leap to the new company however you need to find out:· Is this the permanent rate or a temporary promotion? · If not, then how long will it be in effect? · What will the APR be when the introductory rate expires? · Is there an annual fee? If so, what is it? · Are there balance transfer fees? If so, what are they?(Note: our experience indicates that some creditors can charge fees as high as 3% or 4% of the balance transferred. And, the higher the balance, the higher the fee. So, a 4% fee on a $2000 transfer would cost you $80. Keep in mind that you will be paying interest on that amount as well; if you pay only the minimum required payment, then that fee of $80 could become very costly.)
· Do you lose out on the special rate if your payment is late?

Once you determine to switch credit card companies, be sure your old account has a zero balance before discontinuing making payments to them. Then cut up the old card and send that company a letter asking that they close your account. Be sure you comply with all the terms of both the old and the new credit card companies so that your credit will reflect your responsible payment history. Be sure to use that plastic money only in case of emergency and then pay it off in full each month.

Who wouldn’t want interest free credit for years and years? In theory that’s possible. You just ensure you sign up for a 0 interest credit card balance transfer every time your 0 interest period expires. But is your bank ever going to actually tell you when the expiry date comes round? Usually not, except in the small print. The 0 balance transfer credit card is not something the banks and credit card companies like reminding people of.

But all that is about to change. Technology can do a lot to simplify the way we handle our interest free balance transfer credit card accounts. If only we could remember exactly when the 0 interest balance transfer credit card period is about to elapse we could ensure 0 interest, free credit card use for a long time.

That’s where the Internet’s new Credit Card Balance Transfer Alert service comes in. Whenever a customer orders a credit card from this site they can send off what is known as an autoresponder. This will then tell the customer when the interest free period is due to expire. An email will arrive a week or so before the zero interest credit card time is up, thus allowing enough time for a 0 interest balance transfer to a fresh account.

This could be a 6 month interest free credit card or a 9 month interest free card. In some cases there also exist 12 month interest free credit cards where the balance transfer can take place over just a few days.

In extreme cases there also exist cards where the interest free period can be as long as 15 or 16 months, but these are very rare.

CEO Gordon Goodfellow says ‘We already have hundreds of very satisfied customers on our credit card balance transfer alert service. Lots of eople seem to like the simplicity of it. Who among us can remember a specific date just like that? In effect it means that our customers never have to pay for even one day’s interest being charged. It’s like having a 0 APR credit card for as many years as there are transfer offers.

‘Our records are updated electronically every time a new credit card with 0 APR offer comes along, so nobody misses out. The website gets data directly from the card providers to our customers. You can transfer your balance to a fresh card within minutes of getting the email alert. It’s that simple to use.’

Best of all, the Credit Card Balance Transfer Alert Service is completely free.

Smart shopping for 0% APR credit cards can save consumers hundreds of dollars in interest charges. Many consumers do not think to shop around for credit cards. However, with 60 percent of grocery store purchases being made with credit cards, the decision as to which card the consumer uses can have an impact on how much is paid in interest. One way you can save money in interest charges is to shop around for a 0% APR credit card to transfer existing balances to. The concept of shopping for the best interest rates is not new for purchases such as homes and cars, but so few consumers stop to think about shopping around for the best credit card deal.

0% APR credit cards save consumers money

It is possible for you to save hundreds of dollars a year by transferring balances to a 0% APR credit card. Here is how it works: A consumer applies for a new credit card with a special introductory interest rate of 0% APR for balance transfers. After gaining approval, the consumer transfers the balance of his or her credit cards to the new card. Some companies may waive the balance transfer fee, but a standard fee is usually a small percentage of the transferred balance. Whether the old card has a low 8.9% APR, or whether it has a higher 15.9% APR, the potential savings are well worth the transfer. For the entire introductory period (usually 6 to 12 months) it is possible for consumers to avoid paying interest on their credit card debt.

Sorting through 0% APR credit card deals

Some web sites provide you with an objective way to look at credit card offers. It is even possible to use a calculator to figure out how much you can save by transferring balances to a 0% APR credit card. Consumers receive the information they need to help them decide on the credit card balance transfer offer that works best for them. Objective side-by-side comparisons allow a more complete picture of available credit cards. When you find a card that you like, it is also possible to apply for that card instantly from the web site. Helpful links to the credit card companies allow you to receive instant approval on their credit cards.

A word of caution

A 0% APR credit card balance transfer is a financial tool that can greatly benefit consumers. However, as with all financial tools, it is important to use it wisely. Consumers should be aware that failure to pay at least the minimum payment on time can result in an immediate end to the introductory period. Many credit cards, however, provide an automatic debit system or an online bill pay option. This can help consumers set up automatic payments that ensure that there are no late payments.

Shopping around for the best bargain is a way of life for many. Applying that rule to credit card applications can mean that you get to keep more of your hard earned cash.

In today’s financial market more and more people are turning to credit card balance transfers instead of the traditional home equity lines that they have been used in the past. During the refinance hay-day throwing a tax deductible line of credit on the home to wipe out the credit cards was a no-brainer. Nowadays, shrinking home values and a turbulent secondary market are causing most banks have to hold these loans as opposed to selling them. This means the HELOCS of yesterday are only available to those with impeccable credit who have an abundance of equity in their homes.

Luckily, interest rates are low and balance transfers are a pretty good alternative if your credit card debt is out of control and need some help. This being said there are a few things that you want to look out for when transferring credit card balances from one card to another. The golden rule is that when you use a balance transfer card as an avenue to pay off balances on your other cards let this be your sole purpose. Make a budget and timetable to pay off the debt where there is a beginning and an ending payment otherwise you may get yourself into deeper debt.

Things to look for when transferring credit card balances:

Life of Balance Transfer cards – Life of balance credit cards are just what their name implies, they offer a low rate that applies to the balances you transfer within a certain time period. What you want to look for is a fixed rate that will not fluctuate over time. Depending on your credit level these may not be available to you, however if they are we highly suggest that you seek these cards out. The “gotcha” with this class of cards is that they usually will give you an extra thousand or two on your limit in hopes that you spend it at a higher interest rate, and most people do.

Again, we suggest that you use balance transfer credit cards for the single purpose of transferring higher interest credit card balances to a lower fixed rate. Once the transfer is completed, we recommend that you shred the transfer card and the one you transferred from to keep yourself from using them again. Over 75% of people that transfer balances use the transfer card and the old card again and end up owing more money than they did before the transfer. If the cards do not have an annual fee keep the accounts open for emergencies but shred the cards to keep yourself honest.

The Fine Print – If credit card issuers are similar in one area it is most definitely their fees and the fine print. It seems like they have fees for everything including one for on-time payments. Seriously you need to read the fine print and weigh the fees that apply for balance transfers, late payments, grace periods and other “gotchas” like universal default clauses. Over 80% of people that apply for credit cards will not read the fine print from beginning to end only to be surprised when their bill arrives in the mail. Most credit card websites offer handy calculators to help you calculate the best deal considering all of the fees.

Most credit cards have reduced the grace periods for repayment from 30 days to 20 days in an attempt to earn more fees and interest. If you are like most people, including yours truly, you pay your bills at a certain time of the month that usually coincides with your pay periods. The problem with this is that the 20 day grace period is relative to the due date of last month’s charges and is forever changing. If you pay your bills once a month like I do this will cause you to get late payment fees and could even trip the universal default clause which brings me to my next topic.

Universal Default Clauses – A universal default clause is a nasty little trick that credit card issuers use to jack-up your rates and fees to intolerable heights. If you look at the top of the fine print on each credit card you will usually see the regular APR and one below it that is through the roof. The one below it is the rate you will get should you pay late or even if your credit deteriorates. These clauses range from annoying to nasty and most states are trying to outlaw them but the majority of credit cards still have them.

The only card issuer that I can think of that doesn’t have this clause across the board is Capital One. I’m sure there are others but the clauses differ from issuer to issuer and card to card. Read the fine print for each card you are considering, see what their rules are that will trigger this clause. Some are mild which apply only if you are habitually late, where others monitor your credit and can jack up your rates and fees if your credit is deemed riskier than when they issued the card.

Introductory & Variable Rates – Beware of the asterisks. When you see one of these next to an interest rate you can bet it’s going to change on you. Most cards will advertise 0% interest on balance transfers 12 – 15 months but have cute little asterisks next to the rate. Find the fine print; chances are that your sexy 0% rate is going to morph into a giant wallet munching monster after the intro rate is over. Find out what the adjusted rate will be.The “gotcha” here is that most people know their rate will adjust in the future but they rationalize the transfer thinking that they will have the balance paid off in that time frame. Chances they won’t and the credit card companies know this. How else do you think they can offer 0% interest rates?

Variable rates are almost inescapable because 95% of all cards have variable rates. The ones that do not have them are hidden deep within most websites and offer very few frills. The reason they are hidden is that they are a little tougher to qualify for and offer lower profit margins to the issuers. When searching credit card websites take an extra minute to go all the way to the last page in each category, you may be surprised what you will find. Most credit card websites are arranged with the most profitable credit cards on the first few pages, these are rarely the best credit cards.

Reward Cards – If you are using your balance transfer card as you should, the bells and whistles on reward cards shouldn’t concern you. The bells and whistles cost you more, period. They cost the issuer more and they pass the cost right back to you. If you stay true to the purpose and transfer your balances in order to pay them off you should get a plain-Jane generic card without the usual frills hat comes with most cards. The only frills you should seek are the life of balance feature, fixed rate and a manageable or nonexistent universal default clause.

In closing I hope these tips help you get your very best deal should you decide to use a balance transfer card. This category of credit card is becoming more and more popular every day due to the financial chaos surrounding us today. This is generally a good thing though; this causes the card issuers to come up with different cards that offer better deals to keep up with their competition. Just remember the golden rule, only use balance transfer cards with a specific plan to pay off a balance. If you are “robbing Peter to pay Paul” the credit card companies will usually win in the end. Remember, Las Vegas wasn’t built on winners and neither are large credit card companies.

In an effort to lure you to their credit cards, many credit card companies offer FREE Balance Transfers from your old credit card. Once the money is safely owed to the new company, they will often provide a grace period where they charge far less on the transferred balance. Often times this introductory rate  may last for 6 months to a year after the balance transfer takes place.

Firstly, keep in mind that not everyone who gets an offer qualifies for the super-low rate.

  While opening a new credit card may seem like a smart move when confronted with mounting credit card debt, You might want to pay keen attention to the term of the offer. Sometimes there are fine prints with hidden charges. Some banks may charge a transfer fee that can be a percentage of the balance transferred. Be sure that there is a fixed or one-time charge for the transfer, if possible. Some banks will charge amount, like $60 or $75 dollars for transfer. If the offer is 0% APR introductory rate, see what the after grace period rate is. Make sure the after-grace-period is fixed and reasonable.

 Based on your income, calculate how long it will take you to pay the transfer off.

After the duration of the payment is determined , calculate how much it cost after the grace period to pay the transfer balance off. Make a wise decision after the calculation, else a balance transfer of $5000 or more could  end up costing a couple of thousand dollars or half the amount you transfer. Also, be sure the bank doesn’t charge a high annual fee, or membership fee.

 For example, you might want to accept  a credit card that charge you 4% introductory rate then later goes to 9% fixed rate after a year  over an offer that allow you to transfer at   0% introductory rate  then jump to 19 or 21% after six months.  You can accept the 0% or 2% if you will payoff the transfer amount in the grace period. If you can’t pay the whole amount off during the grace period, transfer the remaining to another credit card offer if you can. Otherwise, if you don’t pay the whole amount off, the credit company will apply the after grace period rate (Let’s say 19%) to initial amount transfer (say $5,000)  even though you might have $25 or a penny left to pay it off.

 For smart  consumers, transferring balance at 0% APR is an excellent method of reducing credit card debt. It leaves the person free to pay down the balance on a credit card without incurring interest charges. Using this strategy, a person could potentially open a new account that offers a balance transfer when the old one expires. Then transfer all of the balance to the new card to begin a new grace period of low or non-existent finance charges. If you plan to do a balance transfer, be sure to close your old account.

 Before closing credit card after the transfer balance is paid off, wait for company may to a notice saying the balance transfer  amount  is completely paid off. Be sure to call the card company and verify this. Write down the name of the person you talked to, the date, the time and what was said.

 To avoid any mix-ups, experts urge people to wait until the credit card company sends them a final bill statement with a zero balance. If the company doesn’t send one, request it. Then cancel the old card – you don’t need it.

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Balance transfers have grown in popularity and importance ever since lenders have started using zero per cent interest rates on balance transfers to lure consumers from other companies to their own.

Introductory Offers

These 0% balance transfer offers give the customer a very low, or zero per cent interest rate on any sum transferred from another credit card, over to them. If you are considering a balance transfer then there are two figures you should be aware of. The first is the APR on the balance transfer, or the balance transfer rate. This will tell you the interest that will be charged on the sum transferred and will generally be very low, or free.

Rate Tarts

In fact these introductory balance transfer offers are what caused the introduction a generation of ‘rate tarts’. Basically a rate tart is someone who will search for a 0% balance transfer deal over and over again to save money on interest repayments. They will keep transferring balances and keep the cash they have saved in high interest bearing accounts. In a strange sort of way they actually use the banks’ money to earn money from them, just what the banks have been doing to customers for years, earning money from their customers’ savings. However, the banks do not like the rate tarts at all and have declared war. The first step, and a very powerful one was the introduction of the balance transfer charge.

Balance Transfer Charge

The other figure you should pay attention to is the balance transfer charge. While you may be charged nothing on the balance once it is on the new card, you may be charged a fee to get it there. This is usually pretty low, about two to three per cent, but you should be aware of it, and only pay it if you have to, and if you genuinely are going to make use of the low balance transfer rate.

Length of Introductory Offer

Another figure that will be of interest when shopping for a good balance transfer deal will be the length of time that the balance transfer rate lasts. It may be six or nine months, and most cards are generally about this period, but make sure you check, as if one card offers you twelve months at one per cent, and another six months at zero per cent, the twelve month card may be more suitable, depending on your circumstances, than the six month card, even though this card has a slightly lower rate.

Get The Best Balance Transfer Deal Available

If you are looking for a good balance transfer deal, then the most important thing to do, is make sure that you shop around and give yourself every opportunity to find the best deal that is available to you. Today, using the Internet, it is easier than ever to search among a huge range of credit card providers and find out exactly what each one is offering.

Only be doing a little home work and shopping around will you be giving yourself the best chance to find the card offers you the best deals. And with offers varying buy such large amounts from lender to lender, and given the amount that people pay on credit card payments, it is vital that you give yourself every opportunity to find the best deals available.

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One of the biggest promotions with credit card companies is that they will offer 0% balance transfers. Many people use balance transfers because they feel that their current interest rate is too high or maybe they’d even like to move all of their debt into one location to keep things more organized. A lot of people are taken into the wind with these offers and jump right on them. However, it is important to read all of the fine print with them. Usually, a 0% balance transfer will only be valid for a set time period. The two most common of these are 6 or 12 months.

Being aware of rates afterwards
Now if you have a credit card that has several thousand dollars in debt the company is baiting on the idea that once the introductory period has ended you will have a balance remaining and will have to pay it off with the interest rate that has been pre-determined. This is where yet another mistake occurs because people don’t check into what the rate will be. For example, if you have a credit card that has an 8% interest rate but see a card offering 0% for 6 months but 20% afterwards you are very unlikely to be able to pay the balance off before that 20% kicks in. Then you’re left with the option of either paying it or continuing the search for another balance transfer offer.

Making a successful balance transfer
Balance transfers don’t have to turn out bad though. If you keep a few things in mind you could actually benefit very well from one.

•    Take a note of the rate marked on the transfer. It could be a fixed amount such as $50 or a percentage of the amount transferred which has the possibility to add up to quite a bit.

•    Also take a mental note of whether or not there is a limit on how much can be transferred. You might not benefit as much as you thought you were going to in the first place.

•    The other rates, like the ones for cash advances or purchases, have a tendency to be higher to make up for the 0% offers  so if you honestly want to get rid of your credit card debt avoid these interest rates and don’t use the card.

•    Read the fine print. The credit card company may allocate your payments to the 0% balance because they aren’t making any profit on it instead of any purchases you make. Avoid this easily by not making any new purchases with this card. Let it serve its intended purpose of getting that debt reduced significantly.

•    Do the math. Write all the figures down (interest, fees, etc…) and make certain that you are definitely going to be saving money by completing the transfer.

Be smart with the cards
Credit cards are a dangerous tool for many people but, in the hands of a well educated individual, they don’t have to be. It can be a long and tiresome road trying to get out of debt but take your time and slowly but surely you will arrive at the end.  For more on Balance Transfer, visit Best Credit Card Ratings – Balance Transfer