Tips on Making Credit Card Balance Transfers
Posted on November 30, 2012 by Michael Martin Leaño
Credit card balance transfers are terrific. In a nutshell, they let you transfer your debt from one credit card to another, and possibly lower your interest rate in the process. To give you a better idea on the other details involved. Here are some tips on making credit card balance transfers.
Tip #1: Find a way to settle the balance
The concept of a balance transfer seems too awesome to be true, but take note that credit card companies aren’t offering balance transfers out of sheer philanthropy. They’re betting that you won’t pay your balance before the introductory period ends. They even make money out of it from the transfer fee that you paid.
Because of this, see to it that you really do pay the balance before the interest rate reverts to its regular interest rate, which is probably close to your previous credit card.
Tip #2: The teaser rate isn’t guaranteed
Just because the ad says your prospective new credit card has zero per cent interest on balance transfers, it doesn’t mean you’ll get that exact same rate. If you have less-than-perfect credit, you might get a 3.99 per cent balance transfer rate instead.
Tip #3: Make sure purchases are also zero per cent
So your new credit card has a balance transfer rate of zero per cent, but this doesn’t mean your purchases are also zero per cent. But that’s not the problematic part; some cards require you to settle the balanced transfer first before you can pay off the balance of subsequent purchases. Be sure you clear this up first with the card issuer or you’ll rack up large interest charges.
Tip #4: Look beyond the interest rate
It’s good to have a zero per cent introductory rate, but it’s not the only thing to look for in a card. You need to look at its other perks (e.g. a rewards program, rebates or a waived annual fee) to make the most of what you’re getting. And to learn more about the other features, you’ll have to do your research and compare several credit cards to get the best deal.
Tip #5: Pay your card on time
Miss your payment just once and your credit card issuer will revoke your zero per cent teaser rate soon enough. You’ll also get a penalty fee. Because of this, make sure that you always pay your card on time, especially during the introductory period.
Tip #6: Never go over your credit limit
The same thing will happen if you go over your credit limit—you’ll lose the zero per cent teaser rate, an over-limit penalty, and a much higher interest rate. To stay out of trouble, keep your credit utilisation rate low; this can also help your credit score.
Tip #7: Check the fine print
Before you get your balance transferred, read the fine print of your prospective credit card. Many of the card’s details are found here, like the interest rate for new purchases or how the company charges balance transfers. Just be ready for some legalese.