This article talks about how balance transfers can go wrong and how to avoid them.
There are a lot of credit card companies out there today, and they are all competing for your business. As a result, they are all coming up with different incentives and rewards to get you to sign up for and use their credit cards. Balance Transfers are a big part of many of these. But if you use these perks to try to get ahead, you may end up with more debt.
Balance transfers with no fees are offered by many credit card companies today. This has helped a lot of people get out of debt. It's very easy to use. If you have a balance on a credit card with a high interest rate, you can move that balance to a credit card that doesn't charge interest on balance transfers. On the balance transfer, the new card will charge you no interest for a certain amount of time. Most of the time, this period lasts 3 months, 6 months, 9 months, 12 months, or even 15 months.
With a credit card that doesn't charge interest on balance transfers, you can save hundreds of dollars in interest fees. But you should know that even with this great chance, there are some things that could go wrong. Make sure that when you read the fine print of a credit card company, you are applying for a card that offers 0% interest on balance transfers and not just on purchases. If you mix these up, you could get into a lot of trouble when you move your balance from one card to another.
Even if you do get a 0% balance transfer offer, you might not get 0% interest on any of your purchases. This would mean that you would pay the normal interest rate on anything you bought with the card.
For example, if you put $6,000 on a credit card and the interest rate is 15%. You decide to transfer your balance to a credit card that doesn't charge a fee for 6 months. If you move the money to a credit card that doesn't charge interest, you'll save a lot of money on interest. You use your card to buy something and then pay back the $100 without thinking about what will happen. But the $100 won't go toward your new purchase. Instead, it will go toward the $6,000 balance transfer. Then, your original card balance will be $5,900 with 0% interest and $100 with 15% interest.
But if you read the fine print carefully, you can find a credit card company that gives you 0% interest on balance transfers and 0% interest on all purchases for a certain time. Just remember that you will have to pay interest on the money again if you don't pay off the debt before the introductory special ends. The idea is to use balance transfers with no interest and pay off all of your debt before your 0% interest rate runs out. You can even use another card with a low annual percentage rate (APR) for smaller purchases and only use the 0% balance transfer for larger transfers.
