As a seasoned credit counselor, I hate seeing people go through hard times when they get into bad credit card debt. Even more so, I hate to see people get themselves into additional financial trouble with balance transfers, because they really are useful for getting out of debt. When they're used properly, that is. It's rare when one of my clients ruins an opportunity to save money and get out of debt by doing a credit card balance transfer, but sometimes they simply fall by the wayside. No matter your debt situation, when you're in possession of a credit card with little or no interest rate, it's difficult to ignore the call of the shopping mall, but so important that you do if you want to reap the benefits of balance transfers. When balance transfers are used responsibly, they can be life-savers. If you have the discipline and willpower to stop charging your purchases and budget in higher bill payments, you might find yourself free of credit card debt much sooner than you thought. 0% balance transfers, if you can find and get approved for one, can make your life easy for as long as a year by allowing you to carry your balance interest-free. Even if you can't get approved for 0% balance transfers, you can probably find one for a pretty low rate. Credit card companies offer balance transfers because they want your business, and they realize that they are likely to gain at least a nominal profit unless you are disciplined enough to pay off your whole balance during your low or no interest rate period. If this is the case, how will the creditor make money off you if you're simply reimbursing them for the debt they paid off to your previous creditor? That's simple--they tack on a transfer fee, which is usually about 3% of the amount you're transferring. Depending on the balance, this fee could actually get pretty high. Make sure it's worth it to you to pay the fee--meaning that you'll end up saving more money in interest than you'll be paying for the credit card balance transfer service. Keep in mind, too, that most creditors will only let you transfer up to a certain amount. Chances are, if you have a high balance on a high interest card, you'll only want to transfer part of it, otherwise you'll end up paying a much higher fee. Determine the highest amount you can feasibly transfer (as long as it is no more than what the card will allow), that way you can make the most out of making payments with very little interest. When my credit counseling clients have questions about 0% balance transfers, I'm happy to steer them in the right direction because I know how helpful balance transfers can be. At the same time, I know that if used irresponsibly, credit card balance transfers can have adverse affects and can put people deeper into the hole than they were previously. That's why I love my job-- I can make sure this doesn't happen.
About the Author:
Written by Kacy Suther. A credit card balance transfer with 0% balance transfer can help you relieve debt. Balance transfers available with no annual fee at SmartBalanceTransfers.com .
Tue, 24 Jun 2008 05:16:28 - 100%
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